For the first time since 2007, Jamaica will fulfill its sugar quota to the U.S. instead of the EU preferential market, because the EU had to drop it’s preferential treatment significantly.
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Post estimates that Jamaica's sugar production will increase to 150,00 MT in the 2009/2010. The
improved performance will be as a result of increased yield due to favorable weather conditions and
expansion in acreages replanted. Jamaica is expected to supply its sugar quota to the U.S.
For the first time since 2007, Jamaica will fulfill its sugar quota to the U.S. instead of the EU preferential market, because the
EU had to drop it?s preferential treatment significantly. Jamaica will also consume more of its own production and rely less
on imports. As the government of Jamaica continues to divest itself of the state owned sugar operations, the projection is for
increased output by 2011. An Italian company has expressed an interest in acquiring the state owned sugar entities and has
entered a contract arrangement to procure raw sugar from the GOJ. It should be noted that for the 2008/09 sugar crop,
Jamaica exported 120,000 MT of raw sugar valued at USD 76 million. The European Union (EU) accounted for all of this
export, except for the miniscule amount of 32 MT exported to the Cayman Islands.
The 2009/10 crop is projected to produce about 150,000 MT of raw sugar - a significantly higher volume than the previous
year. Jamaica is expected to use its production to fulfill its combined commitments to Eridania Suisse SA and the USTQR
and use the remaining sugar domestically. Assuming the Government of Jamaica (GoJ) successfully divests its 60%
ownership of the industry by the end of 2010, sugar production should increase steadily from 2010/11 crop until output
reaches the desired industry target of 200,000 MT of 96-degree sugar. In addition, the GOJ policy includes strategies for the
diversification of the industry to embrace cogeneration and the production of ethanol, rum and specialty sugar.
Consumption of raw and refined sugar in Jamaica has remained relatively flat over the last three years and is expected to
remain flat until the economy improves.
The dry weather conditions since the start of 2009/2010 crop year has bolstered crop quality and increased overall
productivity to an estimated 150,000 MT of 96 degree sugar, an increase of 20 percent from the 123,000 MT produced
during the previous crop. On April 1, 2010, sugar production was slightly behind with only 71,000 metric tons (MT)
produced; the normal harvest is January ? July so by April, the harvest should be more than half way done. The current crop,
despite being affected by too dry conditions at the moment, is still projected to perform significantly better than the previous
The 2008/09 production of 123,000 MT of 96-degree sugar was significantly lower than the forecast of 170,000 MT and a 12
percent reduction over the previous year?s production of 141,000 MT. The passage of Tropical Storm Gustav (later
Hurricane Gustav) in August 2008 and several disruptions of the crop due to poor weather conditions were regarded as the
main factors responsible for the decline in production. In addition, the cash strapped Government owned sugar estates and
factories were ill prepared to process the crop.
Approximately 34,000 hectares of land is cultivated with sugarcane each year with, on average, 88 percent harvested. The
other 12 percent is not harvested because of illicit cane fires, poor weather conditions, labor supply disruptions, and strategic
increase in stand-over fields.
Consumption of raw and refined sugar and molasses continues to be relatively flat.
Total consumption of raw sugar in Jamaica increased slightly by 4,000 MT during 2008/09 MT from 53,000 MT to 57,000
MT. Consumers are turning to this lower cost sugar option as the Jamaican economy was hard hit by the world recession.
On the other refined sugar consumption has been and is projected to remain relatively flat at approximately 70,000 MT.
Consumption of refined sugar, which is used mostly for manufacturing purposes, grows proportionately with the non-
alcoholic beverage and bakery industries. Given the Jamaican economy is still in recession and disposable consumer incomes
remain limited, it is expected that the bakery industry and non-alcoholic beverages will not experience robust growth until
2011. The alcoholic beverage industry consumes about 100,000 MT of molasses and about 5,000 MT of raw sugar per year.
Artificial and herbal sweeteners are present in the Jamaican market, but have not penetrated the retail sector.
As at October 2009, the European Union (EU) reduced the prices of raw sugar imports from Jamaica by 36 percent. The
Sugar Protocol, which allowed Jamaica and other African, Caribbean and Pacific (ACP) countries guaranteed preferential
prices, has been replaced by the ACP Economic Partnership Agreement (EPA). Given the fore-mentioned situation an
attractive differential no longer exists between world market prices and the EU /ACP Economic Partnership Agreement on
As a result, it is the first time in approximately ten (10) years that Jamaica will be consuming locally produced sugar.
Previously, Jamaica?s sugar needs were met largely by wide-scale importation. Data from the Jamaican Sugar Industry
Authority (SIA) revealed that sugar imports were up to a high of 75,000 metric tons of refined sugar annually and
approximately 60,000 metric tons of raw sugar within the period 2005-2009.
Since Jamaica no longer has a quota obligation with the EU and now has the flexibility to choose which markets are supplied
based on economics, they decided to make more of the locally produced sugar to be available to the domestic market. It
should be noted that up until 2009, Jamaica?s EU quota was 127,000 MT with an additional 24,000 MT exported under the
Special Preferential Sugar (SPS) agreement.
The total exports of raw sugar from Jamaica during the crop year 2008/09 declined by twelve percent from 136,000 MT
(crop year 2007/08) to 120,203 MT, valued at US$102 million and US$76 million, respectively. Of total export, 120,171
MT were exported to the European Union and the remainder (a small proportion) to other destinations. It is important to note
that no sugar was exported to the USA under the U.S. sugar tariff rate quota (TRQ) for that crop year.
For the current crop (2009/2010), Jamaica has agreed to supply 79,000 MT of raw sugar to the Italian company Eridania
Suisse SA. An agreement was reached in early 2009 between the Jamaican Government and Eridania whereby Eridania
Suisse would provide interim financing in the amount of approximately US$15 Million to undertake the necessary
preparatory works for the factories, as well as field maintenance work, on the three (3) Government owned estates. The
US$15 million is a pre-payment on the supply of the fore-mentioned quantum of raw sugar, which will be sold to Eridania at
a minimum price of Euro 335 per metric ton. Furthermore, Eridania will share with the Government of Jamaica on a 50-50
basis any profits made on the final sales price, less agreed cost. In addition, Jamaica supplied its USTRQ obligations by May
In order to fulfill local demand, Jamaica imported 71,000 MT of refined sugar during 2008/09-crop year, a slight reduction in
quantities over the 74,000 MT imported during the previous year. With retail consumption remaining flat and inventory
minuscule, increased imports of refined sugar typically varies with manufacturing demand. Despite the liberalization of the
refined sugar market in Jamaica, Guatemala and Colombia continue to be the dominant suppliers to the local market on the
basis of price and availability. Belize and Guyana are minor suppliers of refined sugar to the Jamaican market. Imported
raw sugar showed a marginal increase during 2008/09 moving from 52,752 MT during the previous year to 56,903 MT.
The liberalization of refined sugar imports allows the Jamaica Cane Product Sales Limited (JCPS), private brokers and
manufacturers to import and hold stocks of refined sugar. The JCPS still retains a monopoly on the raw sugar market
(import and export). As of November 30, 2008 the JCPS held 6,000 MT of raw sugar in stock. With the deregulation of
refined sugar imports and increasing storage cost, independent importers do not hold significant stocks of refined sugar.
In July 2009, the Jamaican Ministry of Agriculture & Fisheries reviewed its main policy document on the sugar industry of
Jamaica: ?The Jamaica Country Strategy for the Adaptation of the Sugar Industry 2006 to 2015?. The revised sugar strategy
document is now entitled: ?The Jamaica Country Strategy for the Adaptation of the Sugar Industry: 2006 to 2020.? The
document outlines three (3) strategic objectives which are as follow:
1. The development and maintenance of a sustainable private sector-led sugar cane industry based on multiple
2. Strengthening of the social resilience, economic diversification and environmental sustainability of Sugar
Dependent Areas (SDA);
3. Maintaining progress towards the Government of Jamaica?s (GOJ) macro-economic goals.
Jamaica?s current sugar industry strategy is anchored on divesting the state-owned sugar estates to the private sector. The
privatization of these public sector sugar assets have made some progress with the divestment of two (2) of the five (5)
estates in June 2009. These two sugar factories were sold to Jamaican interests and involved leases of 50 years for the sugar
estate cane lands. The divestment of the remaining government-owned sugar estates is slated to be completed by the end of
2010. Although the divestment process has been protracted, the Government has no other alternative given the huge losses
these entities have incur over many years and the commitments they have agreed to in the recent agreement with the
International Monetary Fund (IMF). It should be noted that the remaining three state-owned sugar estates is approximately
60% of the industry.
Preferential access to the U.S market for ethanol under the Caribbean Basin Initiative provides an incentive to international
sugar companies to operate in the Jamaican sugar industry. Additionally, the policy environment emphasizes diversification
as a necessary risk mitigating and revenue generating mechanism. The predominant thought on diversification within the
industry relates to the creation of a sugarcane (as opposed to sugar) industry, focusing on cogeneration, and the production of
ethanol, refined, specialty and raw sugar, rum and other alcoholic beverages.
The marketing of raw sugar locally and internationally are handled exclusively by Jamaica Cane Products Sales Limited
(JCPS). It should be noted that since 1994 the marketing function has been assigned under an agency agreement to JCPS
Limited, a private company which is jointly owned by sugar manufacturers and sugarcane farmers. As marketing agent of the
state-owned Sugar Industry Authority (SIA), JCPS undertakes the commercial functions associated with the marketing of
sugar destined for export. Although sugar manufacturers are free to sell privately that portion of raw sugar not required to fill
preferential quotas, JCPS undertakes the marketing of locally produced sugar and molasses in the domestic market and
distributes the total revenues of the industry to sugar manufacturers and sugar cane farmers.
In addition, the retail distribution of imported refined sugar in Jamaica is also handled exclusively by the JCPS. However,
refined sugar used in the manufacturing of valued-added products is imported by independent manufacturers. But JCPS
always remains concerned the duty-free refined sugar for manufacturing maybe diverted to the retail trade with price and
demand effects. It is felt that the heavy involvement of the JCPS in the domestic market serves as a means of stabilizing local
retailed sugar prices.
Production, Supply and Demand Data Statistics:
Jamaica & Dep
Sugar Cane for Centrifugal
2008 Revised 2009 E e 2010 UOM t
USDA Post Post Post E USDA Post USDA
Officia Estimat Officia E Estimat Officia E Estimatstimate e e
l e New l e New l e New
Y 12/200 12/200 12/200 12/200 12/200 12/200 MM/YYYear
Beg 7 7
8 8 9 9 Y
Plan 33 33 33 33 33 0 0 33 ted 33 HA)
Harveste 30 30 30 31 31 31 0 0 000 31 (1
n 1750 1750 1750 1900 1900 1900 0 0 1900 MT)
Supp 1750 1750 1750 1900 1900 1900 0 0 1900
Utilization 1744 1744 1892 1892 1892 0 00 0 1892 (10
for Suga 1744 r MT)
for 6 6 6 8 (1000 8 8 0 0 8
Alcoh MT) ol
Ut 0 1750 1750 1900 1900 1900 0 0 1900
ilization 175 MT)
Source: Industry & post estimate
Jamaica & Dep
2008 Revised 2009 Estimat Forecas e 2010 UOM t
USDA Po Post st USDA Post Post USDA Post Post
Offici E Estimatstimat Offici E Estimatstimat Offici Estima Estimatte e e
al e New al e New al e New
Market Year 12/200 12/200 12/200 12/200 12/200 12/200 MM/YYY
Beg in 7 7 8 8 9 9 Y
8 0 8 8 10 6 6 10 0 (100 6
Beg MT) inning
Beet Sugar 0
0 0 0 0 0 0 (100 0
Production 0 0 MT)
Production 140 160 160 150 170 170 130 0 150
Total Sugar 1000
P 160 160 150 170 170 130 0 150
roduction 140 MT)
Raw Imports 54 54 54 53 53 53 50 0 54 (1000 MT)
Imp.(Raw 50 75 75 50 70 70 1000 50 0 75 (
Val MT) )
Total 04 129 129 103 123 123 100 0 129 (1000
Imp 1orts MT)
Supp 252 297 297 263 299 299 240
0 285 (1000
Raw Exports 104 153 153 113 153 153 (1000 90 0 100 MT)
Exp.(Raw 0 0 0 0 0 0 0 0 0 (1000
Val MT) )
E 104 153 153 113 153 153 90 0 135
C 140 140 0 140
onsumpt 38 138 138 140 140 ion 1 MT)
Disappearan 0 0 0 0 (1000 0 0 0 0 0 MT)
138 138 140 140 140 140 0 (1000 140
Us 138e MT)
St 10 6 6 10 6 6 10 0 10
Distribu 252 297 297 263 299 299 240 0 285
Source: Industry & post estimate