Guyana’s rice, sugar price may climb

Aug 16, 2010 News

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– cost of some imported goods skyrocket

By Leonard Gildarie
With a number of disasters worldwide affecting crops like rice, sugar and wheat, authorities are predicting prices will rise and Guyana may stand to benefit, local officials say.
Yesterday, Minister of Agriculture, Robert Persaud, in response to queries about the possible repercussions for Guyana, noted that there is the possibility that the country’s rice might be able to attract higher prices on the international market.
“This is good at a time when the industry is heading for another bumper crop. There is also expected to be increase in the international price for sugar. This is favourable for Guyana’s sugar in the US and Caribbean markets.”

However, he pointed out that the most likely and crucial impact of high and rising grains prices on Guyana will be their knock-on effect on international rice prices, through the high degree of substitution in feed formulas. “However, this effect will only manifest itself if wheat prices continue to rise for a substantial amount of time to affect future feed contracts and will depend on the relative prices of rice and corn.”
In terms of higher wheat prices feeding into domestic inflation, the Minister assured that wheat does not account for a large amount in the typical Guyanese consumption basket, and with the fact that wheat prices typically only account for less than 20% in the price of a loaf of bread, it is unlikely that the Guyanese consumer will experience significant hardship.
“However, should the price of feed rise internationally, the local poultry and aquaculture industries may experience a substantial increase in their cost of production, thus affecting their international competitiveness as well as domestic inflation.”
After the high 2007-2008 rice prices, Guyana has been looking for better deals after prices plunged last year. Many farmers had benefited tremendously from the profits.
With the country a minor player on the world market, it had been forced to become what authorities call a “price taker”.
Even a deal signed with Venezuela last year to ship rice designed to put more money in the hands of local farmers was not enough to calm an industry struggling to handle late payments by millers.
In the field of sugar, a falling Euro value coupled with lower prices is troubling the industry.
However, with moves underway to find new markets for sugar, other than the traditional European one with Tate and Lyle, this may see better prices being offered, if the current market continues in the same direction.
Already, the events on the world market may be affecting prices, with potatoes, onions and garlics on the local market seeing more than a 30% increase for consumers.
A variety of freakish weather conditions across the world has sent the price of staples, including wheat, pork, rice, orange juice, coffee, cocoa and tea to fresh highs in recent weeks.
Recently, the Russian government announced a decision to ban the export of wheat to protect home consumers and this saw grain prices jump 8 per cent immediately, on what was already a two-year high. Russia is facing one of the worst droughts and fires to its wheat crop in history.
Meanwhile, an increasing demand for foodstuffs and raw material in the resurgent economies of China and India has also driven prices for oil, copper and other industrial commodities higher.
However, the United Nations Food and Agriculture Organisation (FAO) has tried to calm fears of a repeat of the food riots seen from Mexico to Indonesia in 2008. “Fears of a new global food crisis are not justified at this point,” it said. “This rapid increase in prices is prompting concerns about a repeat of the crisis of 2007/08. But after two consecutive years of record crops, world inventories have been replenished sufficiently to cover the current anticipated production shortfall.
“On the other hand, should the drought in the Russian Federation continue, it could pose problems for winter plantings in that country with potentially serious implications for world wheat supplies in 2011/12.
Wheat is just the latest crop to be affected by unusual weather. Coffee has been hit by excessive rain in Brazil and Colombia, just as rice production was reduced in India last year because of a late monsoon; pork and other meat prices have been driven higher by rising grain feedstock prices; and the Floridian orange juice harvest is down because of an unseasonal frost.
Politics and speculators have also played a part; the unrest in Kenya in 2009 sparked a rise in tea prices, while the activities of some hedge funds have been blamed for wild fluctuations in coffee and cocoa. Earlier this month, it emerged that hedge fund manager Anthony Ward had cornered a large slice of the cocoa market by buying 240,000 tonnes of beans – a £650M investment, sufficient to make 5 billion chocolate bars. Mr Ward’s hedge fund Armajaro, has refused to confirm or deny these reports. Last month the price of coffee leapt when hedge funds landed in a “short squeeze”.
High and volatile food prices seem certain to lead to more calls for “financial food speculation” to be curbed, though conclusive evidence that they do much more than amplify existing trends is scanty. The EU’s internal market commissioner, Michel Barnier, declared last year, “Speculation in basic foodstuffs is a scandal when there are a billion starving people in the world. We must ensure markets contribute to sustainable growth. I am fighting for a fairer world and I want Europe to take the lead on that.”

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Tucber Park Back Koker repairs near completion

TUCBER PARK, NEW AMSTERDAM – The team from the New Amsterdam Mayor and Town Council is expected to complete work on the Tucber Park Back Koker later today.
Remedial work was necessary after sections of the sea dam eroded, causing water to leak into Tucber Park and Vryman’s Erven. A source told the Kaieteur News that reports of the threat and the state of the koker were made to the relevant authorities since June but no action was taken until parts of the structure collapsed last week.

The contractor executing the job, Kenny Greene, explained that the New Amsterdam Town Council was in the process of doing general maintenance work on the New Amsterdam Market Wharf and other areas when the breach occurred.
He said that water began leaking into the community before the high tide which began last Monday.
According to Mr. Greene, the koker itself is intact but the sea dam continues to erode. Based on this, the high tide lashed out portions of the land and the Canje River overflowed its banks, thus resulting in excess water in Vryman’s Erven last Tuesday and Wednesday.
The contractor was hired to build a new sea dam revetment directly embracing the koker. Sand bags filled with cement mixture were placed to bind the sides since the 16-foot deep defense metal fenders have become porous due to age. The difficulty facing the team is that all materials must be transported manually due to the location of the koker.
Mr. Greene cited the need for general rehabilitation of the ‘pall off’ leading to the koker and for the sea dam between the back koker and the Tucber Park First Koker to be made higher as well.
Work on the back koker began on Wednesday and when completed the team is expected to also do remedial work on the Tucber Park First Koker in the vicinity of the New Amsterdam Technical Institute. This should wrap up within one week.

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