THREAT TO TT SUGAR

A report carried in Friday’s Newsday that the price of cane sugar on the European market is likely to drop by two-thirds, from its present level of US$0.21 to US$0.07 per pound, as a result of current negotiations by low cost producers, Brazil and Australia, will have exposed a serious threat to the Trinidad and Tobago sugar industry.

Both Brazil and Australia have been able to produce sugar far more cheaply than Trinidad and Tobago, largely through the use of mechanical harvesters, which increases the number of acres which can be cultivated for every field worker employed. And with the end of the shelter of the Convention of Lome in sight, under which this country and Australia, along with other ACP States enjoy preferential entry of some 1,294,799 tonnes of raw sugar annually to the European Union, sugar producers in Australia (along with Brazil) may seek to target Trinidad and Tobago and the wider CARICOM market. Australia and Brazil, because they are in a more competitive position, (sugar production and sales wise) than Trinidad and Tobago will be able to effectively challenge this country not only in its domestic market, but within CARICOM as well. Indeed, as it obtains at present, re the production cost per tonne of sugar, it appears to be a no contest.

Local cane farmers, following on the proposed restructuring of Caroni (1975) Limited, which will see them as the principal producers of sugar cane here, will need to become highly mechanised, if they, and the restructured State-owned company grinding their canes, are to retain even the domestic market! Because the cost of mechanical harvesters, as well as that of heavy duty crawler tractors and other equipment employed in the preparation of sugar cane lands is high, the country’s cane farmers may require Government guarantees for loans to purchase the harvesters etc. Even so, the future of the sugar cane industry in Trinidad and Tobago, given economies of scale, is bleak. A challenge, additional to that likely to be posed by Australia and Brazil, will come from Hawaii, whose rate of sugar cane cultivation per acre per man is superior to that of Australia’s.

What is troubling is that the All Trinidad Sugar and General Workers’ Trade Union, the body representing this country’s sugar workers, does not seem to have been aware of the potential threat posed by Brazil and Australia, and clearly Hawaii, to the domestic sugar cane industry. It clearly failed to keep abreast of trends, and instead figuratively placed its head in the sand, ostrich like. But Government is not without guilt, as it had foreseen early that the price of sugar on the European market was likely to drop by 66 2/3 per cent. It should have conveyed this information to the other stakeholders in the industry, as well as sought to develop strategies to deal with what clearly was a situation in which this country’s sugar may not stand a chance of being competitive, even in its own backyard.