Sugar can never be sweet, if it burns a hole in your pocket

Jan 20, 2026 Letters

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Dear Editor,

President Irfaan Ali and the Chief Executive Officer Paul Cheong of GuySuCo have made some interesting statements on the future performance of GuySuCo. (Stabroek News: https://tinyurl.com/yrhsj3pe; Stabroek News: https://tinyurl.com/5n8pe5up).  While there is much that can be examined in these statements, the focus of this letter is to present a brief summary of a few GuySuCo economic indicators for the period 2020 to 2024.

Sugar production data obtained from the Bank of Guyana Annual Reports show that 88.9 thousand tonnes of sugar were produced in 2020. Thereafter, production contracted to 47.1 thousand tonnes by 2024, representing a decline of 47 percent over the five-year period (Figure1).

In 2025, production was initially programmed at 80 thousand tonnes, after which the target was revised downwards to 60 thousand tonnes, but only 59.2 thousand  tonnes were produced, symbolizing the continuous sugar production difficulties. Furthermore, with sugar production declining, it is not surprising that losses would be significant. In fact, GuySuCo  total revenue for the period 2020 to 2024 amounted to G$47.2 Billion, which was correlated with total expenses of G$93.6 Billion; and this generated total losses for the period of G$46.4 Billion (Table1).

With such significant losses, the Government of Guyana unreservedly approved and disbursed  funds to GuySuCo to cover the incurred losses. It can therefore be inferred that the purpose of those disbursements were to keep GuySuCo open, given its role in the community as a major supplier of employment opportunities, and a provider of drainage and health services in the community. For example in 2020, GuySuCo medical department provided primary medical services to employees, their dependents, pensioners, and members of the community (GuySuCo Annual Report 2020).  Consequently, if the financial viability of GuySuCo is important, then the drainage and health care costs should be covered by the National Budget and not GuySuCo. Otherwise, Government disbursements to GuySuCo, using taxpayers funds, will have to continue indefinitely, as the political ramifications will endure, and outweigh important economic outcomes.

Meanwhile, three well defined economic indicators that establishes whether or not GuySuCo is a financially viable entity are identified as follows: sugar-cane output per acre; the number of tonnes of sugar-cane (TC) that is required to generate a tonne of sugar (TS), typically referred to as TC/TS; and the magnitude of the positive difference between the average price (AP) received for a pound of sugar verses  the average cost (AC) of producing a pound of sugar.

Published below are the derived estimates of the average cost and average price per pound of sugar  extracted from GuySuCo Annual Reports. For example, during the period 2020 to 2024, the average cost of a pound of sugar moved upwards from $81.99 per pound in 2020 to $232.67 per pound in 2024, an increase of 283.78% in five years (Figure 2).

What could therefore be gleaned from this information is that the efficiency indicator (TC/TS) has been relatively high. For example, the TC/TS at Rose Hall was in the 20s; and at Albion it was 14 (SN: https://tinyurl.com/45uk3b4h). This level of TC/TS implies that to produce one tonne of sugar, GuySuCo at Rose Hall has to process  no less than 20 tonnes of sugar-cane; and at Albion, GuySuCo has to process 14 tonnes of sugar-cane to produce one tonne of sugar.  In contrast, to produce one tonne of sugar in Brazil only 8 or 9 tonnes of sugar-cane is required (https://tinyurl.com/ycva2wxr). This efficiency performance will signal that the average cost of  a pound of sugar in Brazil will be significantly lower than the average cost in Guyana. GuySuCo should therefore publish the TC/TS data for all the estates so that a better understanding of the sugar-cane production is provided to the Guyanese people.

Another key indicator is the average price for a pound of sugar. During the same period, the average price (AP) of a pound of sugar received by GuySuCo was $73.19, with a low of $50.00 in 2020 to a high of $88.22 per pound (Table 2). Since the average cost (AC) of a pound of sugar was $149.92 and the average price (AP) per pound of sugar was $73.19, this relationship generated significant losses of $76.72 on every pound of sugar sold by GuySuCo, with a minimum loss in 2020 being $31.94; and by 2024, the loss per pound increased to $144.45.

Years ago, sugar was the main source of foreign exchange earnings in Guyana. Today, it is oil which will not be examined in this letter; instead, the emphasis will be placed on other economic activities. During the period 2020 to 2024, the total export earnings from fish and shrimp was US$242.4 M; rum and other spirits earned US$233,4 M; prepared foods earned US$ 113.7 M; and other commodities (diamonds, beverages, pharmacuticals and wood products) earned US$141.9M. In contrast, the foreign exchange earned from sugar exports during the same period amounted to only US$100.5M, a sum that was less than the foreign exchange earnings of the previously mentioned commodities (Table 3).

Undoubtedly, these lesser known economic activities, especially those in the other category, are out-perfoming sugar export earnings; and this should send a clear signal to policymakers about where incentives should be provided; for sugar will not likley be competitive in international markets, where the sugar price on January 16, 2026 was 15 US cents (equivalent to G$31.20) per pound (https://tradingeconomics.com/commodity/sugar). And as noted above, the average cost per pound in Guyana is much higher than the average price in the world market. Consequently, Guyanese consumers of sugar would be better off consuming imported sugar, which is much cheaper (SN: https://tinyurl.com/29a29u2f;

SN: https://tinyurl.com/mrydv9tr) than what GuySuCo can provide on the local market.

In conclusion, the important question for GuySuCo is this:  Can GuySuCo return to being a financially viable business within the next five years? Polcymakers need to present agricultural, financial and economic information that can support a viable outcome for GuySuCo. Otherwise, please put a permanent line in the National Budget for transfers to GuySuCo. As a wise old man said, ‘sugar can never be sweet, if it burns a hole in your pocket’!

Sincerely,

Dr. C. Kenrick Hunte

Professor and Former Ambassador

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• GUYSUCO, Letters, Paul Cheong, sugar

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