The downward trend in international prices and the climate impact are part of the challenges facing producers in the region for the next harvest.
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 the first nine months of 2017, countries in the region exported $1.166 billion worth of sugar, 41% more than was sold during the same period in 2016.
Figures from the information system on the Raw Sugar Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
The guild foresees closing the 2017/18 cycle with a production of more than 17 million hundredweight of sugar, which would represent a 10% increase compared to the previous cycle.
If expectations by employers in the sugar guild are met, production from the 2017/18 cycle would be the best achieved yet.Favorable climate conditions and the expected expansion of sowing areas, from 105 thousand to 109 thousand manzanas, are the reasons for the guild's expectations for the cycle that begins next month.
From August 22 to 25, companies from the sector will be gathering together in San Pedro Sula to participate in business roundtables and discuss topics relevant to the sector.
The Congress of Sugar Technicians of Central America will be held at the Copantl Hotel Convention Center in San Pedro Sula. Business roundtables will be held and international experts will be giving talks on topics of interest to the sector, such as the effect of climate change on sugar production, use of technology, production costs, among other things.
Total production from the 2016/17 harvest surpassed 15.6 million hundredweight, registering an increase of 18% compared to the previous harvest.
Figures from the National Committee of Sugar Producers show that the production of the San Antonio sugar mill was 7 million hundredweight, followed by Monte Rosa with 6.3 million, Benjamin Zeledon with 1.3 million and Montelimar with 1.2 million hundredweight of sugar.
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 2016 the value of raw sugar exported from Central America amounted to $1,019 million, equivalent to 2.6 million tons, 21% less than than what was sold in 2015.
Figures from the information system on the the Raw Sugar Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
In 2015 Guatemala led the export of raw sugar with $848 million, followed by El Salvador with $178 million and Nicaragua with $114 million.
Foreign Trade figures for Raw sugar in Central America, analyzed by the Business Intelligence unit at CentralAmericaData report that in 2015 the countries in Central America exported a combined total of 3 million 292 thousand tons of raw sugar equivalent to $1.289 billion.
The Brazilian Raízen has allied itself with the agricultural commodities company Singapore Wilmar, to create the largest exporting sugar group in the world with 4.5 million tons per year.
From a press release by Wilmar:
São Paulo and Singapore, October 4TH, 2016 – Raízen Energia S.A. (Raízen) and Wilmar International Limited are pleased to announce the creation of a new joint venture called "Raízen and Wilmar Sugar Pte.
During the 2015-16 harvest the sugar industry expects to upload to the national grid between 85 and 90 MW of energy, about 22 MW more than in the previous harvest.
The National Committee of Sugar Producers of Nicaragua (CNPA by its initials in Spanish) plans to increase the energy it uploads to the national system through the four mills operating in the country, explained Jose Adan Aguerri, president of the Superior Council of Private Enterprise (COSEP) .
The planned investment to be made in the Benjamin Zeledon Mill over three years, will double its production capacity allowing it to generate 35 MW of energy.
Most of the investment will focus on electricity installation and cogeneration, considering that it will already will be generating 35 MW in November 2018. Of total generation, 25 MW will be delivered to the national grid and the rest will be for self consumption.
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 "...
Authorization has been given for the purchase of 550,000 tons of sugar cane and 100,000 tons of sugar beet for the current season.
The new allocation established by the U.S. Department of Agriculture (USDA), represents an increase of about 50% on the existing quota of 1.32 million tonnes.
"Among the reasons for the increase of the quota, is the reduction of local production and the abrupt change in market conditions since sugar mills in the United States initiated a trade dispute with Mexico two months ago. Since filing the complaint against the Mexican plants in late March, local prices have gone up by 16%... ".
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 .