The ghost of Caroni 1975 Ltd, the former sugar company which was shut down by the Government in 2007, has come back to haunt T&T, displaced cane farmers are saying. "It might have been a sad mistake on the part of the Government to have closed down the sugar industry," said Seukeran Tambie, former president of the now defunct Cane Producers' Association of T&T. Tambie made the comment in light of the drastic increase in the price of sugar on the world market and a looming local sugar shortage which is expected to seriously affect sugar-based industries.
"It's frightening," Greig Laughlin, president of the T&T Manufacturers' Association, told the Sunday Guardian last Thursday. "Between January 2009 to the present time, the price of refined sugar has been going up drastically." Laughlin said the latest figures (for August 17 to 21) gave the price of sugar as TT$5,134 per metric ton, a 50 per cent increase from the previous price.
Consumers to feel the pinch
The Central Bank and consumers will feel the heavy weight of this price increase, Tambie said. Working out the math, he said some 75,000 tonnes of sugar are consumed locally every year. "You're talking about a $3,800 increase in the price of sugar. "Multiply that by 75,000 and you come up with more than $260,000 in foreign exchange," he said. "Manufacturers will have to locate foreign exchange and there may be added pressure on the Central Bank to make provisions for them to go outside and find sugar."
But, at the end of the day, consumers will suffer most since they may well see an increase in the price of all sugar-based products, Tambie said.
"This brings into question Government's rationality to close down the sugar industry.
"We would not have felt the effects of this international sugar price increase if the local industry was still functioning." While weather conditions may be a reason for the price increase, the United States' move away from the use of fossil fuel (oil) to bio fuel, may be another major factor, Tambie noted. "US businesses are getting large concessions to go to Brazil and purchase large tracts of land to produce ethanol from sugar cane.
"More sugar cane is being diverted into alternative energy and there is less for sugar-based industries worldwide. "The sugar-based industry is a mega industry in the world and a shortage is bound to drastically affect prices," Tambie said. During the closure of the sugar industry the same manufacturers who are now bawling, met with Government officials and supported the move, Tambie recalled.
"They said they could get sugar cheaper outside. It was around $1,600 a ton then." He said, as a result of the closure, some 30,000 acres of land belonging to 6,000 former cane farmers now lie abandoned. Nine thousand sugar workers and another 9,000 cane farmers and their workers were thrown on the breadline. Tambie said those farmers are still struggling to eke out a living. "It costs between $15,000 to $20,000 to develop one acre of land and farmers need funding to put in infrastructure and diversify. "While other African/Caribbean/Pacific countries have already secured European Union grants to develop agriculture, we are still engaged in a bitter battle with our Government to get the funding for us."