Monday, October 18, 2010

Cuba prepares for another bitter sugar harvest

Cuba prepares for another bitter sugar harvest
Mon Oct 18, 2010 2:23pm GMT
By Marc Frank

HAVANA, Oct 18 (Reuters) - Cuba's once proud sugar industry is gearing
up for the 2011 cane harvest with fewer mills scheduled to open and
hopes to merely equal this year's dismal output of 1.1 million tonnes of
raw sugar, the official media reported on Monday.

The Communist party newspaper Granma, quoting deputy sugar minister
Adrian Jimenez Fernandez, said 39 mills would grind the cane into raw
sugar, compared with 44 the previous season and 54 in 2009, with the
"mission of producing a similar amount of sugar as this year's Harvest".

The harvest runs from January into May, though a few mills open in
December for what is called the "little harvest."

Cubans, who saw their monthly sugar ration cut by a pound this year, are
expecting further rationing in 2011 as the cash-strapped island nation
tries to avoid importing sugar to meet its domestic and international

The country consumes 700,000 tonnes of sugar per year and has a 400,000
tonne toll agreement with China.

Traders said they were told the country had no sugar to sell after the
September estimate came in at less than 1.1 million tonnes.

"The plan is to try to reach 1.1 million tonnes, but even that will be
difficult," an industry source in the provinces said.


A local expert, who like others asked his name not be used due to a
prohibition on talking with foreign journalists, said the country would
be lucky to top a million tonnes.

Cuba, where sugar once was king, accounting for 90 percent of export
earnings compared with under 5 percent last year, has drawn up plans to
reorganize the industry and allow foreign investment for the first time
since mills were nationalized in the 1960s.

But the reorganization has yet to begin and negotiations with at least
two foreign companies to jointly share administration of mills and share
production for a limited number of years stalled in June, foreign
business sources said.

Cuba's fall from once being the world's biggest sugar exporter,
producing 8 million tonnes of raw sugar annually, began with the 1991
collapse of former benefactor the Soviet Union, which had paid padded
prices for Cuban sugar to boost the island's economy.

Cuba shut down and dismantled 71 of 156 mills in 2003 and relegated 60
percent of sugar plantation land to other uses. More mills have closed
since then.

Only 1.7 million acres (700,000 hectares) of the over 5 million acres (2
million hectares) once controlled by Cuba's Sugar Ministry are currently
dedicated to sugar cane. (Editing by; Editing by Alden Bentley)

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