Regional body starts work for 2015 agreement

Feb 23, 2010 News

– unhappy over slow pace of EU disbursements

As Guyana continues to grapple with crippling price cuts from the European Union, its biggest sugar customer, a regional sugar association, has signaled intentions to start work on a new agreement that sees better prices and a more stable market for the region from 2015.
The decision was taken by members of the Sugar Association of the Caribbean (SAC), of which Guyana is part of, when the body met last week in Belize. The current sugar agreement is in force until 2015.
SAC, in a released statement from the Guyana Sugar Corporation (GuySuCo), said that the two-day meeting that began on February 18, focussed on the changes in the European Sugar Regime, satisfying regional sugar demands, the future role of the Association and the West Indies Central Sugarcane Breeding Station.
The last was considered in the context of research activities currently undertaken by individual SAC members.
SAC noted that at the beginning of October 2009, new arrangements for the supply of sugar to the EU came into being as a result of changes to the EU Sugar Regime.
This new arrangement is in force until 2015 and replaced the Sugar Protocol which was implemented in 1975 to govern the arrangements for the supply of sugar to the EU.
The new supply arrangements were incorporated into the Economic Partnership Agreement (EPA) between the EU and CARIFORUM countries (CARICOM and the Dominican Republic.).
Instead of individual country quotas as obtained under the Sugar Protocol, the CARIFORUM group now has unlimited access, subject only to a Regional Supply Threshold of 560,000 tonnes of raw sugar, if total ACP sugar supplies exceed 3.5 million tonnes.
Each supplying country is now free to negotiate individual commercial contracts with refiners or sell as direct consumption sugar in the EU, unlike in the past when all the Protocol sugar was sold to Tate and Lyle in the UK.
In light of these changes, members noted that after the 36 per cent price reduction, the EU market was the lowest priced of all the export markets available to SAC members.
This was due to the current high prices in the US and world markets.
However, this situation could change and the EU market could be the most remunerative for SAC suppliers.
Members of SAC, which included Barbados, Belize and Jamaican, also expressed their disappointment with the slow pace of disbursements of funds allocated from EU, which were intended to help buffer the economies of sugar supplying countries from the fall out associated with the price cuts.
With the present pricing arrangement in place until 2015, members of the association also discussed and agreed that work had to commence now in seeking to influence the shape of a new Sugar Regime post 2015.
“The approach would be to come up with clearly defined strategies, establish alliances and sensitise stakeholders. In this regard, a Draft Position Paper has been prepared for ACP Ambassadors in Brussels.
The stated objectives in this Paper and for all sugar suppliers to the EU, including SAC members would be a regime with prices which are fair, stable and reasonably remunerative, access which is secure and a predictable long term market.”
The sugar body also agreed that they had a desire to supplying the sugar needs of the region from local production.
“At the same time, they noted that there were some issues to be resolved, such as enforcement of the Common External Tariff and resolution to divergence of interests on sugar prices amongst Government, sugar users and the industries.”
SAC said that during the meeting, it also agreed to review its role and functions in the face of changes to the marketing arrangements and other challenges.
“Some of the issues to be examined include the role of research and cane breeding, meeting the demands of the regional market from regional production, representing the interests of sugar producers at the regional and international level, as well as maintaining effective links with commercial and political representatives in the EU and U.S.”
During the meeting, GuySuCo’s Chief Executive Officer, Errol Hanoman, was appointed to serve on the Board of Directors for SAC for 2009-2010. Also elected were Barbados’ Leslie Parris; Belize’s José Montalvo and Karl James from Jamaica who will serve as Chairman of the association for 2009-2010.

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