EU: Caribbean may divert exports to get better prices
Published: 03/11/2010, 12:22:30 PM
High prices which are currently being fetched on the US and the World markets for sugar could see some producers in the Caribbean opting not to sell all their commodity to Europe, according to the Barbados Advocate.
So says Karl James, Chairman of the Sugar Association of the Caribbean (SAC) which groups regional sugar producing states.
James said that regional producers Barbados, Belize, Guyana and Jamaica, are getting US$475 a tonne. However, according to him, a shortfall in production by India has driven up the prices on the world market. "Right now you can get from the world market US$600 a tonne and on the US market US$723 a tonne", said James.
"With that kind of pricing mechanism one cannot guarantee the EU how much sugar they will get this year, because people who have an option to supply other than the EU market will do that because of a better price", James told the Barbados Advocate.
He pointed out that what this development has done is to force the Caribbean producers to make some adoptions going forward. "It should allow us to honour our commitments to the EU going forward but allowing ourselves the freedom of taking advantages of the opportunities now presenting themselves in the world market and in the USA market", according to James.
Speaking specifically about EU-Caribbean sugar arrangements, the SAC Chairman said the first challenge is to deal with this first year of operation taking place outside of the Sugar Protocol.
That protocol was suspended last September and according to James, the Caribbean is not supposed to be worst off than before the conclusion of the Economic partnership Agreement with Europe.
"We no longer have a guaranteed price or tied to a quota which existed under the previous regime", he said referring to the Protocol which has stipulated both the price and quota for sugar from the African, Caribbean and Pacific (ACP).
"This time you have access, which is regional access, of about 530,000 tonnes available to Caribbean's four producers Barbados, Belize, Guyana and Jamaica.
However, he noted that on the last occasion when an evaluation was done, the region was unlikely to supply that quota with the shortfall being about 70,000 tonnes.