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A ‘golden brown’ opportunity for Guyana

Jan 25, 2010 Letters

Dear Editor,

The headline screams in the FT of January 22, 2010 – “Sugar crisis worsens as Indonesian tender fails”.

Sugar prices closed last week at 29.82 cents on the world market since Indonesia, one of the world’s leading importers of sugar was not able to procure one pound of sugar on the world market.

Sugar inventories in the world are at an all time low and this crisis is a “golden brown” opportunity for Guyana and GuySuCo.

We in Guyana should be working overtime to position our industry where we can fulfill all our committed market and have excess stock to service the world market.

The unfortunate thing is this situation will not last since the market dictate that with such a high price (c30 cents a pound), there is nothing stopping investors from diving into the market to reap the reward of sweet sugar.

It is unfortunate we are three years behind the curve but with much hope, sweat and precise planning, we can catch up with the wave of sugar prices before it falls.

Although sugar is no longer a key food commodity in developed countries, it is still a crucial source of calories in emerging countries, a select few whom are getting extremely wealthy and that has large populations – India, China, Indonesia, etc.

Thus, Guyana’s future does not necessary lies with the developed world anymore, but with striking stronger relationships with these powerful emerging economies to leverage the funding to feed our development.

I was happy to see Mr. Rickford Lowe announcing that the feasibility study for the Linden to the Lethem road will commence this month and should be finished in 12 months’ time. Now is the time to more actively engage Brazil to support us both financially and technical to build this road. We have a commitment in principle from no less a person that President Lula himself.

We can similarly engage India and China and non-aligned friends like Indonesia to collaborate on projects that will be mutually beneficial. Indonesia is desperate for sugar and Guyana is desperate for help to turn the corner with respect to the sugar industry. Do we not see a mutual opportunity here?

Why not ask GuySuCo to engage Indonesia to help us accelerate the planting of cane with a clear commitment that we will sell the sugar produced from the Indonesian effort to them at world market prices for a fixed number of years.

Indonesia gets it sugar and we get our cane which we can use to grind at the new factory and all are happy. There must be a few thousand acres of land still to be developed and planted and we can engage the Indonesian Government to plant those canes at a profit and sell it to GuySuCo.

In most emerging markets, sugar will remain scarce for the rest of this year and the EU is attempting to capitalise from this high price situation.

The EU has now approached the WTO to review whether it can legally release its excess stock (some 600,000 tonnes) on to the world market.

This position must be resisted diplomatically by Guyana vigorously since it will just dampen a market that is well geared to drive Guyana’s wealth. Guyana should ask our EU Ambassador to object to any unfair release of sugar on to the world market especially when they are buying our sugar at prices that are now below the world market prices.

I await the diplomatic initiatives from the Ministry of Foreign Affairs.

Sasenarine Singh

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