Significant Drop in Sugar Prices

One of the key factors in the business of sugar is markets and the main element is the price. Over the past six months, the World Market price for sugar has dropped significantly with a range of US$ 250 - 275 per tonne which is in the vicinity of 12.5 cents per pound (c/lb). Today 28 June 2017, the price is US 12.66 cents per pound.

The Guyana Sugar Corporation Inc. (GuySuCo) supplies annually, 65,000 tonnes of bagged and packaged sugar to Caribbean and local markets. Another 12,000 tonnes of raw sugar is supplied to the North American market while the remainder which is also raw sugar, is sold on the European market. The supply to Europe for the Second Crop 2017 will total some 70,000 tonnes.

The current forecast is that there will be a surplus of sugar on the World Market for the marketing year 2017/2018. In addition, from 1st October 2017, the European Union (EU) market will also see some radical changes since it is anticipated that significant additional amounts of beet sugar will be available for sale and this will compete directly with cane sugar. This may result in reduced sugar prices in Europe. Due to the competition with beet producers, the price paid by the refiners for raw cane sugar (as supplied by GuySuCo) will be more in line with the World Market Price, which currently is trading at US$275 per tonne and the forecast is that it will not increase significantly in the near future. The price at the commencement of the year was US$396 per tonne.

The anticipated lower prices for the sugar sold will not assist the Corporation’s fragile financial position and poor liquidity will continue to pose a serious challenge in the upcoming Second Crop.

The Corporation is, therefore, encouraging its employees, particularly harvesters and planters, to turn out and assist their estates to harvest all canes in the cultivations and maximise on sugar production. Sugar-dependent communities are also urged to support the Corporation’s outreach drive to increase attendance on all estates for the Second Crop which starts mid-July.

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Historically, Sugar reached an all time high of 65.20 in November of 1974 and a record low of 1.25 in January of 1967.

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