Betting on the latest technology projects, agriculture 4.0 and seeking alternative products derived from sugarcane so as not to depend on international prices, are some of the lines of action on which the Guatemalan sugar sector will focus in the coming years.
Although sugar prices in the international market have improved between October 2020 and April 2021, in previous years there was a downward trend that pressured mills to explore new market opportunities for sugarcane-derived products.
Scheduling medical checkups for the staff, preparing the housing modules to maintain social distance and adapting the logistics of transporting people are challenges that the sugar mills will face during the 2020-2021 harvest.
The sugar cane harvest that is about to begin represents a source of employment for thousands of people in the region and in this context of the propagation of covid-19, the companies will have to face multiple challenges to get the harvest going.
Arguing that the unusual growth in sugar imports is harming local production, the Alvarado administration decided to raise the tariff on products entering Costa Rica from 45% to 73% for a three-year period.
The Ministry of Economy, Industry and Commerce (MEIC) concluded the investigation requested by the Agricultural Industrial League of Sugar Cane (LAICA) and 4 mills, on the safeguard measure against imports of solid state, granulated sugar, known as white sugar, used for domestic and industrial consumption, justifying a deterioration in the main economic indicators of the National Production Branch (RPN), details an official statement dated June 15.
Because Guatemala is the only country in the region still negotiating an FTA with the Asian country, sugar producers estimate that they have stopped selling about 400,000 metric tons.
Months ago it was reported that Guatemalan authorities would travel to South Korea in the first week of October, with the aim of restarting the Free Trade Agreement (FTA) negotiations.
In a context of falling international prices, increasing production and improving efficiency are the main objectives of Guatemalan sugar producers for the 2019-2020 harvest.
Official figures detail that during the 2018-2019 harvest the production of sugar in Guatemala reached 2.9 million metric tons, and for the current harvest that has just begun the harvest of a similar volume is projected.
Costa Rican businessmen complain that because of export subsidies granted to sugar producers in India, there has been an artificial increase in production, causing prices to fall below costs.
Édgar Herrera, executive director of the Industrial Agricultural League of Sugarcane (Laica), explained to Elobservador.cr that "... These subsidies are greater than those allowed by the World Trade Organization, in the order of $10 billion annually.
The World Trade Organization created a special group to address a complaint filed by Guatemala for alleged export subsidies granted to sugar cane producers in India.
By signing the Association Agreement with the European country, Central America achieved an export quota of 56 thousand metric tons of sugar free of tariffs.
Days ago it was reported that the association agreement signed guarantees Central American countries that with the departure of the United Kingdom from the European Union, there will not be a legal vacuum that interrupts trade relations with that country, while maintaining tariff preferences and legal guarantees for companies exporting to the United Kingdom.
Both countries agreed to increase from 60,000 to 125,000 tons the export quota of Guatemalan sugar that enters the Asian nation free of tariffs.
In the framework of the Second Meeting of the Administrative Commission of the Free Trade Agreement between Guatemala and the Republic of Taiwan, held in Taipei, Taiwan on July 8 and 9, both parties agreed to eliminate tariffs for the entry of certain products, informed the Ministry of Economy of Guatemala.
Last year, the main regional crop sold abroad was coffee, with $2.671 million, followed by banana, with $2.594 million, pineapple, with $1.097 million and sugar, with $722 million.
Data from the Trade Intelligence Unit at CentralamericaData:
The main coffee export destinations were the U.S., Germany, Belgium, Italy, Japan and Canada, which together represent 70% of the volume exported by the region, equivalent to approximately $2,050 million. [GRAFICA caption="Click to interact with the graphic"]
Peruvian producers are against the import quotas that were approved in the trade agreement between the two countries, arguing that sugar production in Guatemala is subsidized.
The dispute goes back several years, since the imposition of tariffs on Guatemalan sugar is the reason why the entry into force of the trade agreement was postponed, which had been signed by both countries in December 2011.
Guatemalan producers estimate that for the 2018-2019 harvest production will reach 752,575 metric tons of sugar, a volume that would be slightly higher than that recorded in the 2017-2018 cycle.
The Asociación de Azucareros de Guatemala (Asazgua) projects a slightly higher growth than the previous year because of climate factors, which will be confirmed when they have the final figures for closing production.
Guatemala asked the WTO to review domestic support measures and alleged export subsidies granted to sugar cane and sugar producers, which are carried out in the Asian country.
Luis Miguel Paiz, manager of Asociación de Azucareros de Guatemala (Asazgua), explained to Prensalibre.com that "... Guatemalan producers are concerned about the impact of Indian subsidies on sugar production, transport, storage and export."
During the first nine months of 2018, the main regional crop exported was coffee, with $2,493 million, followed by banana, with $1,939 million, pineapple, with $825 million and sugar, with $645 million.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Because of the decline in the international price of sugar in recent years, agricultural businessmen in Guatemala have decided to migrate to more profitable crops, such as bananas and African palm.
Last year, Guatemalan banana exports totaled $815 million, 4% more than the $782 million reported in 2017, a rise that is partly caused by the increase in the cultivated area in the country.