ETHNANOL IS NO MAGIC SOLUTION TO THE WOES OF THE SUGAR INDUSTRY

Aug 29, 2011 Features / Columnists, Peeping Tom

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The Alliance for Change would like to see two ethanol plants constructed alongside two of the sugar estates in Guyana. It may not be aware that such plans are already on stream and therefore its suggestion is in no way original or instructive.
That said, the movement towards ethanol is a high-risk one. The level of investment required is way too prohibitive to justify such an outlay and would require production principally for export.
But can Guyana compete in the global ethanol market, especially given that the United States may have now achieved greater control of oil markets given its support for the rebels in Libya. The bottom may soon drop out of the ethanol bubble, as oil prices begin to stabilize.
Guyana however was never going to be a major ethanol player. Not so long as Brazil is around. Guyana cannot compete with Brazil in the production of ethanol and the number of vehicles we have locally and the cost to convert them to allow for even a 10% ethanol additive is far too prohibitive.
In addition, Guysuco is not expected to agree for the use of its production for large scale ethanol manufacture. It may, as it is doing, go for a few small plants, but any large scale move to ethanol is going to disrupt its plans for achieving the levels of sugar production that are necessary to bring about a reduction in the price of sugar. As such any ethanol production from cane would have to come through the cultivation of lands outside of GUYSUCO and this will take the level of investment to a level that would no longer allow for a profitable return.
An additional constraint is that given the research that is presently being undertaken, within the next twenty years, new alternatives to sugar cane ethanol will emerge. Therefore in as much as there may have been some interest some years ago in the production of ethanol from sugar cane, that interest is not going to be sustained and in fact sugar-based ethanol is likely to be surpassed by other cheaper forms of fuels from other sources.
As such ethanol is not as attractive an option as it may seem and certainly if oil prices go down it will become even less so.
In addition, with food prices rising, there is going to be a greater pressure on governments to dedicate more lands towards satisfying food production, rather than devoting these resources to the production of energy.
Already the development of fuels from agricultural sources is riddled with moral controversies, especially in the face of a shortage of food in many parts of the world.
Guyana’s procrastination in not jumping on the ethanol bubble may therefore have been a blessing in disguise.
Guyana’s best option is to continue to produce sugar and to do so at a cheaper cost. It is inevitable given the problems in the industry that increased mechanization is the way to go and already steps are being taken in this direction.
Workers now have options open to them. In most cane-producing villages, small business are sprouting up and many workers who would have previously been drawn to the arduous labour in the cane fields are seeking employment in other professions.
Many of them have managed to build their own homes over time and do not want cane cutting for their children.
In many respects, it is the level of improvements that these workers have enjoyed, including improvements in their communities that has led to a shortage of labour on most estates.
Mechanical loaders have been introduced on some estates and so many workers now just have to cut the cane and the loaders lift them up and deposit then into the punts. But cane cutting is still hard work and with alternatives available workers are not keen on continuing.
The sugar corporation is not unaware of these difficulties and knows that eventually it will have to reconfigure the fields to allow for mechanical harvesters. But this is easier said than done because the soil structure and the cost of redesigning fields to allow for mechanical harvesting, is high.
This is the greatest challenge that the industry faces. How to be able to gain the desired level of production in the face of a poor turnout of workers, compounded by regular bad weather and now the problems with its main sugar factory. It is not going to be an easy task and therefore Guysuco has to find ways of getting the job done.
While ethanol production may seem attractive, any ethanol plant is going to be a small one and geared probably for the sugar company’s own uses with some resale for uses in the national electricity grid. But as fuel for vehicles, ethanol production is not going to be viable and consumers are going to be reluctant to bear the conversion costs.
The production of sugar has to remain the principal goal of the sugar corporation. Other things may be tried, including small scale ethanol production and greater use of bagasse in producing electricity, but at the end of the day it is sugar that will either make or break GUYSUCO.

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