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Sugar Scarce On Store Shelves But Not In BSI Warehouse
Thu, October 3, 2024
Sugar continues to be scarce on the shelves, and stores that do have are forced to ration their inventory so that they can satisfy as many of their customers as possible...
Sugar continues to be scarce on the shelves, and stores that do have are forced to ration their inventory so that they can satisfy as many of their customers as possible.

But, Belize is a sugar producing country, and its sole supplier, BSI says that there is no shortage of sugar supply.

And so while it may be scarce on store shelves, it is plentiful in theASR/BSI warehouse. Production is steady, but the company is lobbying hard for an increase in the controlled price of sugar. And today they made that lobby public with the addition of a new anti smuggling packaging format:

For weeks. The sugar shortage has led many Belizeans to question whether SI has been able to keep up with their in-country and export demand. But the truth is that there is no shortage at all, and the sacks on these shelves packaged off and plastic wrapped is a testament to that. The problem lies outside of the warehouse at the borders, more specifically where sugar is being smuggled over for sale and BSI's solution for that is to change the way direct consumption sugar is packaged

Their Director of Finance Shaun Chavarria gave us a firsthand look at that today during a warehouse tour.

Shaun Chavarria, Director of Finance, BSI
"Another part of the objective was to show you the warehouse and the quantity of sugar that we have here, because we have heard reports that customers are complaining that they can't find sugar in the shelves in the supermarkets. And so that is something that continues to worry us because as we've demonstrated here, there is enough sugar in our facilities."

"We are making it available. But somewhere along the supply chain line, the sugar is not always making it to the intended customer. And so that is something that continues to worry us. And in line with that, another part of the objectives was to demonstrate perhaps a solution to this problem. We have said that in the past that one of the issues that is incentivizing smuggling is that the price of sugar, particularly brown sugar in Belize, is below our market price in brown in particular has not moved for 23 years."

"What we've proposed to government is that one way to help combat that is the package, the sugar in retail packaging, because that product would be much more difficult for anybody to try to smuggle. So we've demonstrated behind me the package product that we are able to produce. We've actually started producing it this past year. We've been exporting it to the Caribbean, but we can also make it available for the domestic market."

So what's holding them back from introducing these snazzy packages to Belize in supermarket shelves? It would require a change in the price control structure, something they proposed to GOB be over a year ago, but which the government seems to have no appetite for. And now this is a new strategy of public lobbying. Chavarria describes it as a win win situation, which would address the matter of smuggling but also provides customers with the benefit of getting a more premium product because the sugar will be packaged.

Shaun Chavarria, Director of Finance, BSI
"So we hope that it's something that the government takes on board and we feel that it would provide a solution to this issue that we continue to hear about sugar not being available. So right now, at the beginning of this week, we had approximately 7.5 million pounds of plantation white sugar, and we had 2.2 million pounds of brown sugar."

"The monthly consumption of white sugar is approximately 2.2 million pounds. So what that means is we have enough sugar for the next three and a half months and the monthly consumption for brown is around 800,000 pounds. So similarly, we have enough supply to take us through the end of December. So based on our numbers, based on historical sales, we have the product."

"In addition to that, what we're also been trying to do is sell more directly to certain customers, particularly manufacturers and supermarkets. We know that there has been issues with distribution. Some supermarkets are full as they can't get sugar. So what we've been trying to do is facilitate these customers by purchasing directly. It's not the most efficient way to do it because essentially it means you have more people coming to the facility."

"You have to have certain standards to be able to come in. You have to have a truck that's covered all of these things, right. So it's not really the best solution, but we're doing it as an interim measure to try to address the problem."

The supply chain manager for BSI says they embarked on this packaging pursuit a little over a year ago and it has been supplied through CARICOM. So far over 1 million pounds of the Domino brand sugar is stored within the warehouse waiting to be shipped off in these containers.

Eldy Smith, Supply Chain Manager, BSI
"So this warehouse here can hold up to about 45 million pounds of sugar alright. We do have different types of products right where we store on our customers demand right. In this warehouse ne of the projects that we're venturing into is that we're going to bring this warehouse into humidity controlled warehouse. What does that mean is that we will have the sugar meeting, the moisture requirements."

"As you guys know, Belize is very humid. We're here, we're sweating away right. So we want to ensure that we control the humidity, the relative humidity, and by doing so, will control the humidity in the warehouse. So what that means in the Belizean terms is that we're not getting hardened sugar."

"For the time being our market for this type of packaging is the CARICOM market. Right? So we are exporting, but it's key to highlight that it's an on demand base, right? So we store it in here and when the customer is ready, we ship it out. I think that, you know, they are very happy with this type of presentation in the CARICOM market."

"And I think that, you know, we've got very good news from them, right. Especially since there saying that it's, you know, directly from a container they can put it into the shelf."

If the regulatory structure is amended and that is a big if, they will not only be supplying these packaged versions to the Caribbean, but also the local market. And while the growing demand in domestics sales, which has jumped from 34.3 million pounds last year to 36.7 million pounds this year, Chavarria hopes that if GOB approves, they can begin supplying the packaged product at the start of the 2024 - 2025 crop.

Shaun Chavarria, Director of Finance, BSI
"What we've estimated to government to provide not only a margin for the people that distribute it, but also the supermarkets, is that brown sugar packaged in this format will be roughly a dollar per pound and the white sugar would be around a dollar ten per pound and that's a shelf price, right? So we would obviously have to sell lower than that to provide sufficient margin for distribution because one of that's been another complaint."

"Distributors are saying that we don't make enough to pick up the sugar here and distribute to consumer and then similar retailers. Now, they don't have to worry about packaging it themselves. Hiring people to do it is already built. So their markup is straight on the retail. And we think that that's a price that consumers would be willing to pay because it is a premium product."

"We would still have available industrial sugar, which would be for manufacturers, bakeries and people who make wine. So you essentially have to two prices, one for retail, one for industrial."

The controlled price for brown sugar is 50 cents per pound, and for white sugar it's 75 cents per pound.

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