GLOBAL SUGARCANE MARKET

Sugarcane is a crop primarily grown in tropical countries and has the notable quality of serving as both a food and a fuel source. Along with supplying 86 per cent of the world’s sugar (the remaining coming from beet), sugarcane also serves as a key biofuel feedstock, given that it is highly efficient in converting sunlight into energy. Seventy-five per cent of the sugarcane produced globally is consumed by the food manufacturing sector; the balance is used in biofuel production. Sugarcane cultivation and processing currently provide livelihoods for 100 million people across the world.3 Looking at the country level, the sugarcane industry employs over 1 million people in Brazil, nearly 25 per cent of its rural workforce. The Thai sugarcane supply chain employs 1.5 million people, including 107,000 smallholders, and around 0.5 million people depend on the sugarcane industry for their livelihoods in South Africa.4–6,53 Cane sugar, the raw sugar obtained from processing sugarcane, had an export value of USD 24.7 billion in 2017; an estimated 34.43 per cent (at least 54,593 million tonnes) of total cane sugar produced that year was exported. The largest cane sugar exporting countries in 2017 were Brazil (USD 11.4 billion), Thailand (USD 2.6 billion) and France (USD 1.3 billion); the largest cane sugar importing countries were Indonesia (USD 2.3 billion), the United States (USD 1.7 billion) and Bangladesh (USD 1.1 billion).Cane sugar supply growth outpaced demand growth for human consumption from 2016 to 2017, at rates of 8 per cent versus an estimated 2 per cent respectively. This imbalance resulted in a global cane sugar surplus of around 11 million tonnes. Assuming favourable weather conditions, this cane sugar surplus is expected to persist, according to projections through the year 2025, due to the expansion of planted areas in Asia, specifically China and Indonesia, as well as improved farm productivity. Developing countries account for approximately threequarters of global sugar consumption. They are expected to lead the future demand growth of the sector with increasing consumption of caloric sweeteners, processed products, sugar-rich confectionery and soft drinks. For example, in 2018, sugar (white or refined) met almost 80 per cent of the sweetener market demands, which had a retail value of USD 57.5 billion. Asia leads in terms of demand growth, followed by Africa, mainly due to population growth and urbanization, rising incomes and shifting dietary patterns. In contrast, demand is expected to stagnate in developed countries due to slowing population growth; dietary changes; health concerns related to sugar consumption, such as obesity and diabetes; and government interventions to reduce sugar intake.

JAMAICA SUGARCANE MARKET 

The Jamaican sugar industry is over 500 years old, dating back to 1509 when the island was under Spanish rule. Later under the British plantation system the island became the major producer and leading exporter of sugar in the world. The industry achieved its highest level of production in 1965when 516,825 tonnes of sugar were produced from 4,731,943 tonnes of cane reaped from 59,773hectares. At that time eighteen factories were in operation. Because of the need to increase efficiency and benefit from economies of scale the number of factories operating on the island declined steadily from 140 in 1900 to the current number of 6.

Over the past ten years, apart from some minor spikes in production, the Jamaican Sugar Industry has experienced decline in cane and sugar production. Cane and sugar production over this period averaged 1,805,871 and 163,387 tonnes respectively. For the 2010 crop the industry produced 121,806 tonnes sugar from 1.4M tonnes cane.

Of the total cane supplied, independent cane farmers contributed 39% while estates produced 61%. The high costs of cane production, low cane yields and the relatively small margins have been driving cane production down particularly that of independent cane farmers. The industry over the years has suffered from a number of structural and institutional weaknesses including run-down capital assets , a road network that places logistical constraints on the economic transportation of harvested cane, low capacity utilization and lack of maintenance of the factories, loss of time due to mechanical breakdowns at the factories and interruptions of cane supply. The industry is also affected by, hurricanes, droughts, unseasonal weather and diseases. 2 Most recently the industry was affected by tropical storm Nicole and Richard which caused severe flooding in some cane areas. All the above factors have resulted in low land productivity, relatively poor cane quality, inefficient field and factory operations, reduction in hectares reaped and a deterioration in the conversion ratio (TC/TS). Consequently, the industry could be classified as a high cost producer. It is important to note that the cost of production varies widely within the industry. In spite of the above challenges the Government of Jamaica is desirous to have in place a viable, efficient, and competitive sugar industry which will contribute to rural development and social stability, and one which is sustainable in the new global environment.

Economic and Social Contribution

The sugar industry continues to be vital to the Jamaican economy and remains the country’s single most important crop, contributing just under two per cent to the nation’s G.D.P, and earns approximately US$74.5 million annually. It is the second largest single employer of labour, employing approximately 38,000 persons directly during cropping season and 28,000 persons out of crop. It is estimated that some 200,000 persons (about 8 per cent of the population of 2.6 million) derive their income directly and indirectly from the industry. Sugar cane is grown in almost every parish. It accounts for over 40,000 hectares or 40% of the land under permanent agriculture and about one-half of the population live in sugar dependent parishes. The importance of the industry cannot be assessed simply by its contribution to G.D.P. and its annual foreign exchange earnings because it plays a central role in many other aspects of the Jamaican society. Jamaica’s rural economy, social stability and security in urban areas depend on the existence of a viable sugar cane industry. In the rural areas and around towns such as Frome and Sav-laMar in Westmoreland, Lionel Town in Clarendon, Duckenfield in St Thomas and Clark’s Town in Trelawny the growing of sugar cane and its processing into sugar is the major or only economic activity. In the out- of-crop period many people are given credit which is paid up during the cropping season.