In October 2017 production limits and the "out of -quota" production concept will eliminate for the manufacture of biofuel and industrial non-food products.
The current production quota for sugar according to the European Common Agricultural Policy (CAP), which applies to the 28 countries in the bloc, is 13.5 million tons per year.The production capacity of sugar producers in the European bloc is higher than the quota, therefore eliminating production limits will lead to a lowering of prices due to excess supply, similar to what has already happened in the milk market following the elimination of production quotas.
The drought caused a decline of 18% in the 2015/16 harvest, and exporters project a reduction of $40 million in foreign sales.
Sugar producers are backing a plan to improve productivity per hectare in the next harvest in order to try to recover some of what was lost in the 2015/16 harvest.In the current harvest the climate phenomenon reduced total production to 2010 levels, falling from 790 thousand tons in the period 2014/15 to 650 thousand tons in 2015/16.
At the request of the Agricultural Cane League the government has extended until the end of November the investigation into alleged dumping against the sugar importer La Maquila Lama.
The as yet unresolved conflict could once again make its presence felt with the import of organic sugar on the part of the Agricultural Cane League and also the importer La Maquila Lama, who filed with the Commission to Promote Competition (COPROCOM) a complaint of alleged monopolistic practices.See: "Sugar War in Costa Rica".
After five consecutive months of increases, the index of food prices fell slightly in July, reflecting a reduction in the prices of cereals and vegetable oils.
From a statement issued by the Food and Agriculture Organization:
4 August 2016, Rome –The international prices for majorfood commoditiessaw a modest decline in July, following five consecutive months of increases. The FAO Food Price Index (FPI) averaged 161.9 points in July 2016, slipping 0.8 percent (1.3 points) below its level in June and 1.4 percent below its level of July 2015.The overall decline of the Index was largely caused by drops in international quotations of grains and vegetable oils, more than offsetting firmer dairy, meat and sugar prices.
Increased acreage did not offset the effects of drought which caused a 11% drop in production in 2015/16.
In the 2015/16 season productivity fell by 16% compared to the previous harvest, going from 1,524 hundredweight per hectare in the previous harvest to 1,273 hundredweight per hectare in the current one.
Aside from these results, the Nicaraguan sugar industry estimates that the results of the next harvest will be better because of the projected increase in rainfall over the coming months.
Maquila Lama has denounced the Agricultural Industrial Cane League for "pressuring wholesale businesses to remove" the product that the importerdistributes.
In a statement the company Maquila Lama says that"... for several days notices have been received from stores that sell the Mr. Maximus brand of sugar, in which it was indicated that sales representatives from LAICA have come to offer better conditions such as providing credit and transportation of the product to their outlets, among other things, with the condition that they stop selling Mr. Maximo sugar on their premises. "
Sugar, coffee and lead are the three major export products to the North American country, but opportunities have also been identified for vegetables, fruits, fish, shrimp, plastic, wood and textiles.
Exports of Guatemalan goods to Canada up to April 2016 amounted to $141 million, 83% more than was exported up to the same month in 2015. In order to take advantage of the opportunities the Canadian market has for exporting other products such as fruit, fish, plastics and textiles, for example, there is a need to ".... strengthen sanitary and phytosanitary measures and improve logistics in order to reduce shipping times for the products".