Export saga

Tate & Lyle wants decision rescinded on bulk sugar

There is a new twist to the sugar industry saga facing Barbados, as one of the world’s most powerful sugar and multinational agribusinesses resists moves by the island to end it exports of bulk sugar to the United Kingdom.

Officials of Tate and Lyle’s Sugars (TLS) have been seeking to get the Ministry of Agriculture rescind its  decision to stop supplying the commodity to TLS, which is the only sugar cane refiner in the UK, providing 850 jobs at its Thames refinery in Central London.

However, Minister of Agriculture Dr David Estwick has been insisting that it made no sense for the island to persist with its sale of bulk sugar to the EU at a “massive” loss. He has further suggested that the only scenario in which bulk sugar production makes financial sense, is at the domestic and  regional level where Barbados could take advantage of the CARICOM Single Market and Economy rules of origin with respect to importation of sugar.

Dr David Estwick
Dr David Estwick

However, this position is not sitting well with the UK’ sole sugar refiner, which, according to Barbados TODAY investigations, has now enlisted the support of the British High Commission in Bridgetown.

Last month, the High Commission, through it Trade & Investment division, wrote to the Permanent Secretary in the Ministry of Agriculture Esworth Reid seeking to arrange a meeting between local agriculture officials – including Minister Estwick – and the top brass of Tate and Lyle to discuss the matter.

However, Estwick declined to meet with the officials and instead sent his Chief Agricultural Officer Barton Clarke as the Government’s representative at the talks.

In the letter dated November 7, 2014 – a copy of which has been obtained by Barbados TODAY – the head of Trade & Investment for Barbados and the Eastern Caribbean, H.S. Howell, sought to make a case for this country to continue selling bulk sugar to TLS in London.

“By way of background, TLS – part of the ASR Group – purchase (and has done so for many years), all of the bulk raw sugar exported from Barbados with preferential access to the EU,” the letter said.

It noted that in 2012, the value of those sugar sales to Barbados was about 11 million US dollars.

The British official was also at pains to inform the Permanent Secretary that TLS was currently facing “existential challenges” as a result of changes to the EU sugar regime.

“The amendments will liberate the production and sale of beet sugar and isoglucose products in the EU market from October 2017. They will tend to drive down the price of sugar in the EU, which has traditionally been higher than world prices, due to the regulation,” Howell noted.

However, he told Reid that imported raw cane sugar was covered by the European Partnership Agreements.

And to press home its concern regarding the Government’s decision to cease bulk sugar exports to TLS, the senior official said that sourcing the commodity from traditional suppliers such as Barbados was important to its operations.

“It also means TLS have a shared interest in their sustainability and success,” added the letter.

The trade and investment official also brought to light plans by TLS’ parent company – American Sugar Refinery (ASR) – to take control of the Barbados-based West Indian Central Sugar Cane Breeding Station (WICSCBS) as part of moves to make major inroads into the local sugar industry.

It informed the Permanent Secretary that the plan would improve the sustainability of the breeding station in Barbados by joining forces with other Florida cane growing companies to widen membership in the Sugar Association of the Caribbean (SAC), comprising Barbados, Jamaica, Guyana and Belize.

The letter further revealed that this plan would contribute a pro-rata basis of cane ground, meaning that TLS and ASR would pay the lion’s share of the running costs, thus relieving the other SAC members of any responsibility.

The UK official said in the correspondence that the two companies were seeking Barbados’ support for this initiative and that was one of the reasons the Senior Vice President and International Relations Advisor at Tate and Lyle Sugar of London, Mac McLachlan, and President of Redpath Sugars in Toronto Jonathan Bamberger were trying to have a meeting with Estwick.

But in a letter to Minister Estwick after meeting with the TLS representatives, the Chief Agricultural Officer reported that a company called Florida Crystals, which recently bought over the Belize Sugar Corporation, was owned by the same Tate and Lyle, which were all affiliates of ASR.

Sources told Barbados TODAY that Florida Crystals had been advising a group of local industry stakeholders who recently withdrew an alternative plan to rescue the struggling sugar industry.

Tate and Lyle has also had meetings in recent times with the Barbados Agricultural Management Company as they were concerned about the Government’s proposal for transforming the sugar industry from bulk sugar production to “a multipurpose sugar cane industry, producing food grade sugars, electricity and other downstream products to ensure the economic viability of the industry,” Clarke warned Minister Estwick.

emmanueljoseph@barbadostoday.bb

26 Responses to Export saga

  1. Carl Harper December 12, 2014 at 4:02 am

    “…Minister of Agriculture Dr David Estwick has been insisting that it made no sense for the island to persist with its sale of bulk sugar to the EU at a “massive” loss.”

    Dr Estwick is correct. We cannot allow these British and European entities to continue to dictate the price and how Barbados should sell its sugar. If the sugar industry is to survive, we must “take the bull by the horns” and make a bold attempt at reforming and restructuring it. The traditional approach–bulk exportation–has been to the industry’s demise.

    Barbados is now set to record the worst sugar harvest in modern history next year –12,000 tons. The initial sugar forecast from the 2014 harvest was 18,000 tonnes, compared to last year’s production of about 20,000 tonnes. From a high of 100,000 tonnes–approximately 52,000 acres–of the finest sugar in the 1970s to an embarassing low (16,000 tons) this year; from an island that was pivotal to the Sugar Revolution in the 17th century.

    Over the years we have had to endure reduced sugar quotas and price reductions from the EU. In other words, they made the sugar industry unprofitable and drove frustrated farmers away from planting canes, opting instead to allow their agricultural lands to idle for a few years, then apply for planning permission to subdivide them for more lucrative housing, golf courses, and commercial development to a lesser extent. 

    If Tate and Lyle’s Sugars is concern about its survival, so too should Barbados be about its future existence.

    Reply
  2. Ralph White
    Ralph White December 12, 2014 at 7:02 am

    I am not apprised on the sugar industry but it seems to me world demand for sugar is not there due the health implications of sugar. In that I think the cost of producing sugar cane and then processing it to make sugar is the main reason for high cost to produce the product. I think the focus to fix the industry needs to look at cost of production and for it to be lowered. We need to export products and this is another loss for us to earn foreign currency.

    Reply
    • Leroy McClean
      Leroy McClean December 12, 2014 at 8:55 am

      You definitely do not understand the industry, the product nor the issue.

      Reply
  3. Rawle Spooner
    Rawle Spooner December 12, 2014 at 7:05 am

    Make no mistake Barbados will buckle under pressure and go back to these guys once the political big wigs in London start making noise remember we only independent in name.

    Reply
  4. Ralph White
    Ralph White December 12, 2014 at 7:12 am

    It seems we have Advantage we have something they need! Demand a higher price!

    Reply
  5. Matthew Greaves
    Matthew Greaves December 12, 2014 at 7:46 am

    See this foolishness now??? It takes $1000 to make a ton of sugar into its final state. Barbados have been making a substantial loss for years by selling this same bulk sugar to the UK for $1 a ton and it has get to the point where the sugar industry can no long afford to sell it at this low price which is one of the main reasons why were in this position now and this UK company wants to object to us refusing to sell them our sugar for next to nothing because it employs 850 British citizens? so why the UK government don’t help us with the 400 million that we need to restructure our industry and keep 1200 Barbadians employed that would be affected directly and indirectly if we don’t get the money need to restructure it. Are we suppose to run an industry at a loss forever???? If we as a country don’t wake up and stop from kissing a** we will find our selves in a worse state than were already in! who wants to blast me can go ahead

    Reply
    • Olutoye Walrond
      Olutoye Walrond December 12, 2014 at 1:01 pm

      Mr. Greaves, how did you arrive at your price of one dollar a ton for Barbados sugar to Europe?

      Reply
    • Matthew Greaves
      Matthew Greaves December 12, 2014 at 1:05 pm

      Because i am directly involved with the sugar industry its the bulk sugar that is sold for $1 a ton and the special sugar is sold for 67cents a pound

      Reply
    • Vicki Gaunt
      Vicki Gaunt December 12, 2014 at 7:27 pm

      Sugar isn’t cheap to buy in the uk. Its a quid a bag. 3 bbd$ lol

      Reply
  6. Bruce Slater
    Bruce Slater December 12, 2014 at 8:17 am

    I’ve never understood why we simply don’t sell in bulk. Creat smaller bags of a premium product that is manufactured here using local resources and local labour. Make it a top shelf item that can go straight to the supermarkets around the world.

    Reply
  7. Richard December 12, 2014 at 8:45 am

    I would advise the Caricom governments to be very wary about ceding control of the Cane Breeding Center to these multinationals. There is important gene and intellectual property which they wish to control – as Monsanto controls many cereal cultivars.

    Reply
  8. Leroy McClean
    Leroy McClean December 12, 2014 at 8:54 am

    This is at the root of the push back against the funding of the multi-purpose factory and the cane industry restructuring project.

    Reply
  9. Robert Foster
    Robert Foster December 12, 2014 at 9:17 am

    That’s one way reparate. You go David. What sugar any way? We still got dat?

    Reply
  10. Patrick Blackman December 12, 2014 at 9:47 am

    Well said Carl..

    Reply
  11. kay-rani rosita December 12, 2014 at 10:11 am

    Well said Carl Harper well said.

    Reply
  12. Derek Bain
    Derek Bain December 12, 2014 at 10:28 am

    What’s the rationale for making a loss to date… Keeping people employed? I’m sure it would have been cheaper to just pay them their salaries to sit at home and do nothing. I’ve never understood why they continued to allow the sugar industry to lose money. If this was any other business, they would have raised their prices, diversified, or shut up shop.

    But No… Not Government.

    Reply
  13. jr smith December 12, 2014 at 10:41 am

    Why wasnt they any thoughts or direct discussion , to transform the industry and divert to sugar beet. There is no future for the cane industry in barbados.
    If (TLS )is really honest and concern about the Barbados industry, why dont the Covernment for a trial period of 3 years ,let (TSL ) manage the industry as a private concern. with some benefits to barbados.
    Other than that ,give it to me and I will do a better job, would sit back and wait until its near finish to do somthing.

    Reply
  14. seagul December 12, 2014 at 11:56 am

    We continue to organise a society around protecting the privileges of people that are already rich..sugar. Unemployment is a crime against the workers. We need to be free of sugar-addiction.

    Reply
  15. Carl Harper December 12, 2014 at 1:27 pm

    “…Minister of Agriculture Dr David Estwick has been insisting that it made no sense for the island to persist with its sale of bulk sugar to the EU at a “massive” loss.”

    Dr Estwick is correct. We cannot allow these British and European entities to continue to dictate the price and how Barbados should sell its sugar. If the sugar industry is to survive, we must “take the bull by the horns” and make a bold attempt at reforming and restructuring it. The traditional approach–bulk exportation–has been to the industry’s demise.

    We export local sugar for around $900 per ton, which costs approximately $1,300 to produce. The island then imports sugar for local consumption at around $1,400 per ton and sells this imported sugar to the local market for $100 less per ton–losses all around–because the price of sugar is controlled.

    Barbados is now set to record the worst sugar harvest in modern history next year –12,000 tons. The initial sugar forecast from the 2014 harvest was 18,000 tonnes, compared to last year’s production of about 20,000 tonnes. From a high of 100,000 tonnes–approximately 52,000 acres–of the finest sugar in the 1970s to an embarrassing low (16,000 tons) this year; from an island that was pivotal to the Sugar Revolution in the 17th century.

    Over the years we have had to endure reduced sugar quotas and price reductions from the EU. In other words, they made the sugar industry unprofitable and drove frustrated farmers away from planting canes, opting instead to allow their agricultural lands to idle for a few years, then apply for planning permission to subdivide them for more lucrative housing, golf courses, and commercial development to a lesser extent.

    If Tate and Lyle’s Sugars is concern about its survival, so too should Barbados be about its future existence.

    Reply
  16. kay-rani rosita December 12, 2014 at 3:20 pm

    Ralph White that is the way it should be but unfortunately, it does not work that way.

    Reply
  17. jr smith December 12, 2014 at 3:31 pm

    Is this an indication, we don’t have the persons qualified, or able enough to negotiate, the best deal for the industry in Barbados , for the past decades.
    Where the blame for the massive failure, of the sugar industry lies.

    Reply
  18. Charly Bamboo
    Charly Bamboo December 12, 2014 at 5:11 pm

    Those men in So called independent Barbados or anywhere else in the Caribbean have got the ball to stand up those Crooks in Europe.

    Reply
  19. Omowale Elson
    Omowale Elson December 12, 2014 at 6:02 pm

    I will have to admit that Florida Crystals left a bad taste in my mouth; I have been using their sugar which is sold in health food stores. Perhaps, this is where the Government can activate the Diaspora!

    Reply
  20. Robert Holloway
    Robert Holloway December 12, 2014 at 8:09 pm

    Sounds like marketing cane sugar as a product shipped from Caribbean is a better way
    Many people will buy specialize cane sugar
    Just need to take control of market
    Why ship bulk when you are being underpriced by EU
    Get your own control and ship final product
    My thought

    Reply
  21. Marsha Armstrong December 12, 2014 at 9:38 pm

    what?? we have something England needs!!! i say increase the rice… $11million only

    Reply

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