The downward trend in international prices and the climate impact are part of the challenges facing producers in the region for the next harvest.
Wednesday, October 10, 2018
According to data from CentralAmericaData, the average price per kilo of sugar exported by countries in the region fell 38% between May 2012 and June 2017, from $1.13 to $0.70.
In Guatemala's experience, Central America's main exporter, the fall in export prices has been sustained over the last seven years, since during the months between January 2012 and March 2018, the average price paid per kilo reflected a clear downward trend, registering a 41% fall.
Regarding the effects of the climate in El Salvador, Luis Bettaglio, president of the Cane Producers Association, said to Laprensagrafica.com that due to the drought they suffered "... At the beginning of the rainy season, that lasted 30 days, and the sugarcane fields have not grown, they expect a 10% to 15 % decrease in national sugar production this year. Some areas have more losses than others: the dry corridor, the southern part from La Libertad, La Paz, San Vicente, Usulután and San Miguel was the most affected by the 2015 drought, and the same thing occurred to them this year."
Bettaglio added that "... On the other hand, international sugar prices are at the lowest levels in the last 10 years. More than 50% of the country's sugar production is exported at these lower prices, so there would be a double impact."
The article states that "... Currently, the cost of the production of a quintal of sugar in El Salvador is $19, and this same quintal is sold to countries like China for only $11."
In 2017 the main exporter of raw sugar in Central America was Guatemala with $759 million, followed by El Salvador with $187 million, Nicaragua with $111 million, Costa Rica with $104 million, Honduras with $57 million and Panama with $23 million.
The fall in international grain prices in recent years has increasingly affected producers in the region, who at current prices do not even reach the production costs.
Since years ago, international sugar prices have reported a clear downward trend, and in the last twelve months the quintal price registered a fall of 23%.
Entrepreneurs in the sector reported that for the 2017-2018 harvest the volume produced amounted to 11.6 million hundredweight, 2% more than what was registered in the previous harvest.
Representatives from the Association of Sugar Producers of Honduras (Apah) announced that between the harvests of 2016-2017 and 2017-2018, the country reported an increase of 200,000 hundredweight in the volume of production, going from 11.4 million to 11.6 million.
In El Salvador, businesses in the sector estimate that sugarcane production will fall due to the drought that is affecting different areas of the country and which has now been ongoing for 35 consecutive days.
Without agreeing on the estimated losses that the sugar sector will face, representatives from different business associations reported that the damage caused by the drought will be reflected in a reduction in production.
Sugarcane growers estimate that exports from the 2013/2014 crop will be reduced by 10% due to the negative effects of climate and oversupply in the global market.
In recent months, a decrease in the price of sugar has been more evident, "... a hundredweight went from being quoted at $24 two years ago, to $19 in March 2013 and now to $15 ... therefore producers have lost between 5% and 10% of their income. "
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