Latest update April 11th, 2025 9:20 AM
Gloomy future for GuySuCo as low sugar prices forecast
GuySuCo’s CEO, Dr. Raj Singh
The news is getting gloomier for the Guyana Sugar Corporation (GuySuCo). It is unlikely that the entity, the country’s largest employer, is going to turn a profit anytime soon. According to world prices, sugar continues to hover between US$0.15-US$0.18 per pound. And it is not likely to rise.
GuySuCo itself has admitted, to angry Opposition Parliamentarians, that at least for the next three years, it will only manage to bring down costs to US$0.26.
It would mean that for another three years unless prices somehow miraculously go up, GuySuCo will be recording more losses.
The sugar industry situation is continuing to evoke anger across the country after disclosures recently that the flagship factory, part of a US$200M project, produced sugar last year using 26.9 tonnes of cane to produce one tonne of sugar, more than double the industry average which stood at 12.9 tonnes of cane to one tonne of sugar.
The factory was the worst performing one in the industry last year.
It has been operating at a loss since its commissioning, amidst huge fanfare, in 2009, by former President Bharrat Jagdeo. Billions of dollars are being pumped into the industry annually in subsidies and other bailouts, without the fortunes changing much.
The Chinese-built factory, financed under a massive loan scheme, suffered one technical issue after another even despite experts being hired from South Africa to salvage the situation.
Last year, the industry barely squeezed past the original 216,000 tonnes target budgeted at the beginning of 2013, but unable to meet the adjusted 219,000 tonnes that GuySuCo ambitiously forecast in June. In 2013, it fell to its lowest in 23 years.
The fact that the industry employs 16,000 persons has remained hot potatoes for the political parties who are unwilling to pull the plug on a growing embarrassment.
Over the last few days, there have been a slew of letters and blog postings expressing outrage, but Government has remained silent on its plans to reverse the current slide.
There have been calls for the industry to turn to ethanol and to explore increasing electricity production to the national grid.
According to data, world sugar production reached 175M tonnes in 2014, as compared to 162M tonnes a few years back. It is not likely to come down.
Analysts are now saying that for GuySuCo to solve its liquidity problems, it will have to be rescued to the tune of billions by the treasury in the coming months.
Former President Bharrat Jagdeo
Former President Bharrat Jagdeo had vowed to personally see that Skeldon’s fortunes turn around, but there has been silence in his corner for one of his initiatives.
In July, GuySuCo officials appeared before the Parliamentary Sectoral Committee, to report that it has $58B in debts.
This includes money to local and foreign suppliers, the Guyana Revenue Authority, the National Insurance Scheme (NIS) and the Sugar Industry Labour Welfare Fund Committee (SILWFC).
In recent months, GuySuCo reportedly took almost $4B in loans from a Jamaican bank to finance expenses for its second crop.
Over $20B (US$100M) is owed for the new Skeldon Sugar Factory to the World Bank, China EXIM Bank and Caribbean Development Bank.
While last year, GuySuCo was getting US$715 per tonne, a glut in the market caused prices to tumble to now US$350.
The Skeldon expansion project is the most expensive project to date in Guyana.
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