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%.
In the first days of January last year, the international price of sugar was above $15 per quintal, and that value has been decreasing in recent months, falling to $12 per quintal at the beginning of this year, according to Investing.com.
Businesses in the sector foresee a decline during the 2018-2019 harvest, attributed to the drought and the illegal invasion of lands resulting from the political crisis that Nicaragua is experiencing.
According to statistics from the National Committee of Sugar Producers (CNPA), during the last two harvests the country reported a sustained increase in its sugar production.
Last year, 2.3 million tons of bagasse were used to generate energy, and production is expected to be even higher this year.
The National Committee of Sugar Producers (CNPA) expects that the generation of energy using cane bagasse will be maintained in the medium term, since they predict good results for the production of cane. Last year, 2.3 million tons of bagasse were produced, which were used to generate energy, and this year they expect production to be even higher.
In the first four months of the year the volume exported was 256 million kilos, 84% more than in the same period in 2016.
Growth in the cultivated area and productivity improvements explain the better performance of the sugar industry in Nicaragua.In the first quarter of the year, not only did the exported volume go up, but so did exported value, going from $50 million generated in the same period in 2016 to $118 million this year.
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 Colombian sugar company Mayagüez has acquired a 60% stake in Casur Sugar Holdings, owner of ingenio Benjamin Zeledon, in the department of Rivas.
The company Casur Sugar Holdings has 1,900 employees and can grind 645.185 tonnes of cane, producing 1.2 million sacks of sugar a year, with sales of more than $38.3 million.
Elnuevodiario.com.ni reports that the Colombian company "...
Guatemala has reported a productivity of 101.68 tons of sugarcane per hectare, followed by Honduras and El Salvador, reaching levels of 93.47 and 89.94, respectively.
During the harvest from November 2012 - June 2013, Guatemala achieved a productivity of 10.57 tonnes of sugar per hectare (TSH), higher than that achieved by producers neighbors El Salvador and Honduras which achieved TSH of 10.55 and 10,03, respectively.
Estimates are that the future prices of sugarcane will increase by up to 13% due to drought in Brazil, which in 2013 accounted for 28% of global production of the grain.
A shortfall in global sugar production and consequently higher grain prices is what is seen in the medium term in the global agricultural market. The effects of climate on sugarcane crops in Brazil have resulted in a decline in the production of the world's largest producer.
Projections for the 2014 harvest are that it will be 64 thousand tons more than the last one, reaching a record of 782 thousand tons.
The growth is attributed to the investments that are being made in the sector, which together amounted to $400 million in 2012-2016.
The CEO of the National Committee of Sugar Producers (CNPA) of Nicaragua, Mario Amador, said " ... weekly production in sugar mills is 600,000 quintals (27,600 tons) of sugar. "
The Monte Rosa mill will invest $100 million in a new boiler to increase the amount of power generated from bagasse from 32 to 55 MW .
The mill plans to increase the amount of energy generated based on sugar cane waste by investing in a new boiler. With this extra power, the company aims to supply about 10% of domestic demand.
"That will require an additional investment of about a hundred million dollars to install a new boiler that will allow us to grow from 6.3 million to 7.3 quintals of sugar per harvest. But the most important thing is not more sugar, but to generate more energy. We want to deliver 55 megawatt hours of clean renewable energy and have the ability to generate all year round, not just during the harvest ", said Bernardo Chamorro, general manager of Monte Rosa in an article on Laprensa.com.ni .
With the reduction in harvests in Mexico and India, sugar production could decline for the first time since 2009.
World production of sugarcane could decrease by 51% during the 2013-14 season compared to the 2012-13 period, as a result of the decline in prices caused by a fall in production in Mexico and India, according to researchers at Kingsman SA.
The yield increased from 62 to 75 tons per acre, which will enable 7 million quintals to be export from this 2011-2012 harvest .
In the previous harvest 2010-2011, agricultural output was 62 tons per acre planted, but an increase in productivity and the area planted, produced yields of 75 tons in the current harvest, said entrepreneurs.
In the period 2011-2012, Nicaragua harvested 13 million quintals, of which 7 million will be exported.
The level of global sugar prices will depend on the resilience of Brazil's 2012 crop, which in 2011 fell for the first time in 10 years.
In 2010/2011, the Brazilian sugar crop fell for the first time in 10 years, causing a drop in world sugar prices. Forecasts for the recovery of Brazil’s high production levels are mixed.
Ivan Melo Filho, director of Raizen, a joint venture between the Brazillian company Cosan and Royal Dutch Shell, said they expect cane production in south-central Brazil this year to be about 535 million tonnes, given the maintenance work and replanting in the area.
With an undetermined investment amount, Nicaragua's Grupo Pellas has taken over the Chabil Utza Mill at Alta Verapaz and proposed its revival.
Miguel Maldonado, the general manager of Chabil Utzaj, told Siglo21.com.gt that the new administration will be composed of Guatemalans who have extensive experience in the sugar industry.
The project to put a sugar mill into operation in the Polochic Valley, has never worked since its installation in 2005, when the Widdman family, the previous owners, moved the Guadalupe Mill from Escuintla to Alta Verapaz, with funding of $ 20 million awarded by the BCIE.