New ship takes biggest sugar shipment ever
It doesn’t get a whole lot of respect in Belize’s increasingly diversified economy but when it comes to agriculture, sugar is still number one. On Thursday News Five’s Janelle Chanona took a long slow ride on a sugar tug and found that while the industry has been taking its licks the future may be sweeter than we think.
Janelle Chanona, Reporting
At 600 feet in length and a cargo hold able to carry 24,000 tons, the “Federal Oshima” is the biggest ship ever to carry Belizean sugar. It has taken more than 32 days for all the sugar to be loaded on the Canada bound vessel. This shipment represents almost one quarter of all the sugar Belize exports. Managing Director of Belize Sugar Industries, Joey Montalvo, says even though it will be a good year for the industry, prices on the world market are in a slump.
Joey Montalvo, Managing Director, Belize Sugar Industries
“This year is going to be a bountiful year in terms of sugar production. We’ve had excellent quality in cane. We’ve had good yields in sugar but unfortunately the price is very low. In real terms, the world price of sugar is even below where it was back in the early mid 80’s.”
“This cargo that is being loaded here, 23,000 tons was sold for about 5.25 cents U.S. per pound, F.O.B. and nobody can survive at that. But it’s sugar that has to be sold.”
You may think this translates into bad business for Belizean cane farmers but Montalvo says, in this case, it’s the factory that’s feeling the pinch. He says BSI estimates it will lose about two millions dollars this year. The solution? Increased production.
Joey Montalvo
“I think we are no strangers to hard times. We feel the whole global structure for sugar is changing and what we need is volume. Take this year for instance; we would have to sell all our world sugar at about nine cents, 8.5 or 9 cents for us to break even. So what it really means for us is that we have to increase volume. I would say from a 125 to 130 thousand tons of sugar to 150 thousand tons.”
Janelle Chanona
“Realistically, Belize can produce that much?”
Joey Montalvo
“Yes, we can.”
But with the removal of subsidized preferential markets on the horizon and a currently unstable EURO, Belize sugar will have step up to real competition. For now BSI is keeping an optimistic point of view.
Joey Montalvo
“Whenever the market stabilizes after the removal of subsidies, preferential markets and so, I think we’re probably going to see a world market price stabilizing at 14, 15 cents. That’s my view. Some people say it might be less, but I think we can come through at about twelve cents.”
Until then, BSI is trying to tighten its belt. A few years ago the company thought about investing in a storage facility on the Western Highway but after initial cost estimates were produced, the company had to back off.
Joey Montalvo
“One of the strategies that we’re looking at is to try to sell more sugar to CARICOM where we can get a better price, this is direct consumption sugar. For instance, next year, if we were to sell, and Jamaica has expressed interest in buying up to 20,000 tons of sugar from us, this year they are buying 8,000, last year they bought 11,000. It means that we have less sugar in bulk going through a facility which would not make such an investment viable.”
BSI is now investigating the possibility of co-generation. A venture that would sustain the factory’s energy needs, and according to Montalvo, half of the countries.
Joey Montalvo
“Instead of buying a boiler, which is very inefficient, what we need to do is to go for co-generation. Which basically means taking the bagasse that is obtained after milling the cane, and converting that into steam and power for your own operation and taking the excess and putting it into the grid. If we do a full blown co-generation installation, that will likely be able to generate more than 50% of the demand for energy in Belize.”
And while BSI hopes that one day they’ll have a proper handling facility, for now company tugs and barges continue to make the 36-hour journey to move the sugar from the Tower Hill factory to the ships moored off Belize City.
Janelle Chanona for News Five.
Last year sugar earned over 45 million U.S. dollars in export revenue.
DUE TO A PUBLIC AND BANK HOLIDAY ON MONDAY, THE NEXT NEWSCAST WILL BE ON TUESDAY MAY 2ND.
