Estimated 5,000 tonnes of sugar being smuggled out annually

Jul 01, 2008 News

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– distributors’ quota reduced

By Leonard Gildarie
Local officials are estimating that approximately 5,000 tonnes of sugar is being smuggled out of the country annually.
The claims are being made even as distributors are saying that they are not to be faulted for the current shortage of sugar in Berbice, something that has led to high prices for the commodity.
According to the distributors, their quota was cut by some 25 per cent, and this was obviously one of the reasons why the local market has been affected.
However, Chief Executive Officer of the Guyana Sugar Corporation (GuySuCo), Nick Jackson, yesterday explained that it was simply a case where some local distributors were not purchasing their full quotas.
In assessing the situation, the Corporation found that while, for example, a distributor may have a quota of 200 bags per month, in many instances he was only purchasing a fraction of that quota.
The slack has since been picked up by other distributors, such as Geddes Grant and the New Guyana Marketing Corporation.
A number of distributors visited Kaieteur News yesterday and said that the distribution process has become much more difficult.
Last year, the Corporation would deliver the sugar to the place of business, but now the situation has changed, with trucks lining up at the Demerara Sugar Terminal for sometimes two/three days.
Only two days per week are now available for the sale of sugar to local distributors, instead of the five days that formerly obtained, it was claimed yesterday.
Additionally, the Corporation is not accepting cash anymore, and there are further costs associated with preparing a Manager’s Cheque at the bank, a charge that may vary depending on the bank.
While sugar is being purchased at $3,800 per bag, the retail price is as much as $4,600.
According to the distributors, GuySuCo advised that the quota cut was only temporary, since the Corporation had to meet CARICOM and the European Union quotas.
“When you take 25 per cent of sugar from the market, you can expect a shortage,” one distributor said.
“Further, we hear people talking about smuggling. Why is nothing being done to catch the Berbice smugglers? All we asking is for us to get our quotas, because the demand is too high right now.”
Meanwhile, a Sugar official yesterday estimated that around 5,000 tonnes of sugar is being smuggled annually. While to some this may seem like a drop in the bucket when taking into account that GuySuCo last year recorded production of over 266,000 tonnes, this loss is significant to the local market.
Local consumption is estimated at around 15,000 tonnes annually, but is showing 20,000, a rather high per capita figure when compared with neighbouring countries.
According to the official, this means that the sugar is going somewhere, and the strong indications are that it is being smuggled to Suriname.
There have been reports that sugar is packed in containers and hidden among other goods, and these escape the eyes of Customs officials, the official claimed.
Over the weekend, Berbicians complained that they were getting to buy only very small quantities of sugar, and were being charged high prices.
Sugar has been scarce in Berbice for the past several months. Further, the price of the commodity has doubled in some instances.
On Saturday, a Government official monitoring the situation said that there are indications that sugar is being smuggled to Suriname and that distributors are hoarding the commodity.
The Ministry of Agriculture has reportedly written the GRA Commissioner General, Khurshid Sattaur, on the smuggling of sugar to Suriname through the Corentyne.
According to the official, there are several complaints that distributors have been hoarding sugar following reports that there were shortages.
GuySuCo has warned that it will stop supplying sugar to anyone found unfairly driving up the price.
In a press statement a few weeks ago, a company official indicated that even though the sugar price has remained unchanged since 2006, GuySuCo has received reports that some wholesalers are charging far more than expected and blaming GuySuCo.
In an advertisement published in the Kaieteur News of Sunday, May 18, the Corporation advised that, over the past two years, the price for a 50-kilogram (110 lbs) bag of sugar ex-factory has remained at $3800.
“If any wholesaler is found to be driving up the price, they will be struck from the list of approved suppliers,” the advertisement warned.
Kaieteur News understands that the Corporation has been holding down the price of sugar despite rising costs.

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