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Consumers Will Pay (Dearly) For Int’l Sugar Price Slump
posted (November 27, 2015)
The controlled price of sugar that you buy at the store will go up by 25 cents per pound. That's the decision that Deputy Prime Minister Gaspar Vega announced this afternoon when he came out of a meeting with the 3 cane farming associations and the factory owners.

As we've been telling you, this was what sugar industry stakeholders have been pushing for, ever since they found out that the price of sugar in the European market is down. It is a welcome decision to the farmers who say that they are teetering on financial ruin - but not very welcome for consumers who will see the price per pound go up from 50 cents to 75 cents. That's 33 percent more per pound - steep - which is likely to drive up prices for many food items made with sugar.

The cane farmers and the factory owners got the opportunity today to lobby for this increase at a meeting with the Sugar Industries Control Board and the Ministry of Agriculture. Now, to be specific, this meeting happens every year before the start of the crop season. The discussion usually centers around the work that Government does to improve the sugar roads, the 2 million dollars fuel subsidy for farmers, and the subsidized licensing of cane trucks. Coming out of the meeting today, Deputy Prime Minister Gaspar Vega told the press that the Government looked favorably on this increase to mitigate the effect of the low prices of sugar abroad:

Hon. Gaspar Vega, Minister of Agriculture
"The increase on locally consumed sugar which is a request that the cane farmers have been doing for probably for the past 2 crops. And today I think that was one of the most important lobbying that was being done and I want to announce that the government did approve the 25 cents increase per pound for our locally consumed sugar. Some people thought that probably it could be even more because of the price on the sugar in our neighboring countries which is Mexico and Guatemala and even at 75 cents per pound, we are still lower than the price sold in Chetumal or Melchor."

Reporter
"When will it come into effect and what all need to happen to that to be imposed?"

Hon. Gaspar Vega, Minister of Agriculture
"As we speak both CEO and I are looking into getting the SI ready, sending it to the attorney general so that its approved and made law and hopefully we would be able to do that pretty quickly. That will assist them. That should be giving them something like $4.60 more per ton. So instead of $35.33 or something like that, they should probably get another $3. Because the $4.60 the way it works, BSI only pays a percentage upfront. You have to remember that ASR does not collect for the sugar until it's sold. So the first payment that they make it's not money that they have collected from the sugar that they will be selling. So they either have that in savings which I doubt, or they have to make a loan. So those are the challenges that the industry has to learn about."

All parties agree that the best start date for this upcoming season is December 7.

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