On Wednesday we told you about the letter written to the Deputy Prime Minister of Belize Gaspar Vega by the three cane farmers associations. In the letter, the heads of the associations express concern with the first price estimate of $41.56 submitted by BSI/ASR and are asking for the company to review the assumptions which they used to reach that estimate in order for it to be increased including improving the TC/TS from 9.5 to 9.0. Apart from other proposals, the Belize Sugar Cane Farmers Association, Corozal Sugar Cane Producers and Progressive Sugar Cane Producers Associations are also asking Government to review the current price of sugar sold in the local market and for it to be increased by 25 cents. Basically, the three associations made the same proposals to BSI/ASR outlined in a letter dated November 12th. While the associations are yet to receive a response from GOB, they have obtained a reply from BSI/ASR and from all indications it is not a positive one.
In the letter dated November 19th, BSI/ASR reiterates its own disappointment with the cane price estimate which fell by 21% compared to last year but also indicates that at this point in time there is no room to increase the cane price. Despite the fact that the company has considered the arguments put forward by the associations, they believe that the assumptions which led to the cane price estimate are considered realistic.
While the BSCFA has stated that they have evidence that back’s up their theory that the milling company can increase the price estimate, including a European Commission report citing a higher price than that in BSI’s estimate, BSI’s response is that the price reflected sugar which had arrived in Europe during 2015, including from Belize, but which had been contracted in advance when prices were higher. The real price of sugar contracted today is reflected in the cane price estimate and is similar to prices being paid to other Caribbean countries, says the company.
For the upcoming crop season 1.225 million tons of cane are expected to be milled producing one hundred and twenty nine tons of sugar based on a TC/TS ration of 9.5. As mentioned, farmers are requesting that the estimated price be based on a TC/TS ration of 9.0 which would automatically see an increase in price. But that too is farfetched, says the company.
According to BSI/ASR whilst cane quality improvement measures have been in effect since the 2011 crop, the actual results for the past five crops demonstrate a wide variation in TC/TS due to range of factors beyond the company’s control including weather, cane maturity, impact of stand over cane and the timing of the crop.
At the end of their response to the associations, BSI emphasized the estimated cane price was based on fair assumptions, but at the same time stated that any improvement in any of the assumptions realized during the crop would be fully accounted for and paid to farmers in the second and third payments for the 2016 crop.
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