The Salvadoran sugar sector has exported the first 16,000 tonnes of a quota of 25,087 tonnes which corresponds to the country for 2014.
From a press release by the Ministry of Economy (MINEC):
El Salvador has exported 16 thousand tons of bulk sugar thanks to the Association Agreement between Central America and the European Union
The Ministry of Economy and the Sugar Association of El Salvador too part this May 13, in the dispatch in the Port of Acajutla, of the first ship carrying 16,000 metric tons of raw sugar as part of the El Salvador's quota for 2014 with the European Union. This delivery is part of the Association Agreement between Central America and the European Union (ADA), which came into force on 1 October for Costa Rica and El Salvador.
The 6,330 tons are part of the quota of 8,110 for 2013 negotiated under the framework of the Association Agreement with the European Union.
"Costa Rica is entitled to a quota of 19,464 tonnes, but for 2013 it is 8,110 tons, because the CAAA did not come into effect until October 1st," said Edgar Herrera, executive director of the Agro-Industrial Sugarcane League (Laica) .
The losses not only come from lost export quotas but also from the uncertainty that has arisen among European buyers.
From a statement from the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF):
Negative Effects of Not Having AA In Effect Now Showing
The Guatemalan Exporters Association, AGEXPORT, has made an assessment of the effects that are now evident from the non-entry into force of the Association Agreement with Europe, which go beyond trade issues.
Nicaragua is able to sell 10,163 metric tons duty free to the EU.
Altogether, the Central America's total export quota adds up to 150,000 tons.
Mario Salaverria, president of the Sugar Association of El Salvador said the decision to sell the sugar was due to "uncertainty about the problem they had with Italy and that delivery times won't allow them to make the most of this access."
In the remainder of the year Nicaragua will only take advantage of 30% of the eight million pieces of textiles that the EU has assigned it, meaning that sales will be worth just $2 million.
Dean Garcia, executive director of the Nicaraguan Association of the Textile and Apparel Industry, explained that with one quarter of the year left it will be difficult for Nicaraguan firms to find new European customers.
Nicaragua, Honduras and Guatemala managed to place the product in Europe at $480 per metric ton, $120 above the price on the international market.
The auction was held under the framework of the Association Agreement between Central America and Europe. Although it was possible to place the sugar at a good price, producers had wanted to sell it for $500 per ton, said Mario Amador, general manager of the National Committee of Sugar Producers (CNPA).
Added to the 17 thousand tons that Nicaragua and Honduras can offer are 25,000 from Guatemala, which will be auctioned to buyers from the European Union.
Elnuevodiario.com.ni reports that "Nicaragua and Honduras are offering 42,000 tons of sugar in the electronic auction to be held today for the second time under the framework of the Association Agreement, or AA, between the European Union and Central America, after the first round was unsuccessful. "
Nicaragua and Honduras are allowed to sell 65,000 more metric tons duty-free to the European Union.
The country has given approval for both Nicaragua and Honduras to receive this benefit temporarily, until the trade agreement becomes effective for Guatemala. "The Council of Ministers of Economy and Trade for Central America (Comieco) gave authorization this weekend for each country in the region to be able to make available its quotas at will" reported Nicaraguahoy.info.
The European Union will not mediate in the distribution between the Central American countries of the sugar quota of 60,000 tonnes allocated to the region.
"The European Union will only check the total regional quota has been reached and will not intervene in how it is distributed among the five Central American countries. The distribution and quota management is an internal matter for the Central American region," said Klara Klanska, commercial counselor of the EU to Central America.
The auction to place 17,000 tons with 35 European buyers was annulled because of an inability to meet deadlines.
The information was confirmed by Mario Amador, general manager of the National Committee of Sugar Producers (CNPA). "... The auction in which Nicaragua and Honduras intended to sell about 17 thousand tons to 35 European buyers from 10 business houses set up in different countries, could not be completed because of non compliance with certain technical conditions ...", reported Elnuevodiario.com.ni.
The country won't cede its sugar quota to Nicaragua and Honduras, and it opposes to Guatemala, El Salvador and Panama conceding theirs.
For Costa Rica, Guatemala and El Salvador the Association Agreement with the European Union has not yet entered into force, so they are prevented from offering their sugar in an auction where 35 buyers bid to bring it to market in the old continent.
Nicaragua and Honduras want to regionalize the EU quota, to be able to offer 53,000 tons of sugar.
Producers want the export quotas that the sugar growers in Costa Rica, El Salvador and Guatemala were not able to meet, as in those countries the Association Agreement is not yet in force, said Mario Amador Rivas, general manager of the National Committee of Sugar Producers (CNPA).
With the delay in the entry into force of the AA, sugar producers in El Salvador will lose out on $2.5 million this year, from not exporting 10,000 tons to Europe.
"We could lose out on about $2.5 million, that's both producers and millers," said Julio Arroyo, CEO of the Sugar Association of El Salvador (AAES), adding that they still have the possibility to make the shipment and they have not looked for other recipients for the 10 thousand tons.
The sector, which was ready to export 10,000 tonnes of sugar to the European Union, must wait two more months to do so.
Non-acceptance by dairy farmers in El Salvador and Costa Rica of the geographical indicators for Italian cheeses has caused a delay of at least 60 days of the entry into force of the Association Agreement with the EU.
"We were ready to export, but if there is no treaty we will have to send the sugar to another market at a lower price than would have been paid by the Europe" said Julio Arroyo, CEO of the Sugar Association of El Salvador.