The "death roll" is a manoeuvre performed by crocodiles on their prey. In a disturbing analogy, it would appear lack of political will in the end could well inflict the death roll for much of the Caribbean sugar industry. Political will is crucial to the creation of a high-value CARICOM regional market for the pact’s 4 producers (Barbados, Belize, Guyana, and Jamaica) – arguably the single most important route to avoid a sticky end to the whole industry with the loss of EU preferential trade. The required political will is so far lacking. According to a March 15 Press Release by the Sugar Association of the Caribbean (SAC), the failure of CARICOM Member States to strictly enforce a 40% Common External Tariff (CET) means around 60% of imports still come from outside the region duty-free - under waiver or suspensions from the CET - even though CARICOM already produces more sugar than it consumes. Duty free imports (typically refined but more recently brown sugar also) displaces CARICOM regional sugar and producers are forced to export elsewhere for lower returns. The SAC urged the CARICOM Secretariat to take definitive and immediate action in safeguarding the viability of the sugar industry by ensuring all 15 Member States properly apply the CET on sugar imports.
WKS believes if CARICOM governments cannot forge a regional sugar market behind an effectively applied CET, several Caribbean sugar industries will be condemned to a not so sweet end. CARICOM historically imported refined sugar – mainly from Guatemala and Colombia – while exporting raw sugar to preferential markets in the EU and US. CARICOM members regularly applied the 40% CET to imports of raw and brown sugar but for refined sugar the CET wasn’t applied because there was no refining capacity within CARICOM. That was the case because there was no incentive to invest in capacity to produce refined or plantation sugar because producers had long benefited from preferential access to the EU and US for their raw sugar. CARICOM typically showed a 140,000-215,000 tonne tel quel production surplus between 2010 and 2016.
CARICOM Sugar Balance Running up to EU Quota Abolition (ISO data 2010-2016)
Annual Production: 420,000 to 515,000 tonnes, tel quel.
Annual Demand: 285,000-300,000 tonnes (excludes Haiti).
Annual Exports of Raw Sugar: 315,000-380,000 tonnes.
Annual Imports: around 150,000 -180,000 tonnes to meet CARICOM’s refined sugar needs.
But EU quota abolition in October 2017 (resulting in lower EU prices and shrinking imports) proved very disruptive as for decades EU preferences had sustained sugar production in the four CARICOM producers at prices well above world market levels. With prospects of far lower income for Caribbean sugar industries with the loss of EU preferences, the pursuit of an integrated high-value CARICOM sugar market was identified as perhaps the single most important route to avoid a sticky end to the whole industry. That’s not to say other strategies aren’t important and these are highlighted below. The 4 Caribbean producers are at different stages of charting and implementing a way forward within the context of all these possibilities.
Creating a regional market provides the opportunity for the CARICOM industry to produce high quality direct consumption sugars and plantation white sugar to satisfy the Caribbean market- in effect replacing imports of cheap refined white sugar, while industrial users would instead mainly use CARICOM plantation white sugar.
Proponents of a CARICOM market for CARICOM producers correctly stressed that such a market could only be achieved if the CET were applied to all sugar (the CET tariff must be effectively managed and enforced across the region - there must be a uniform application of CET on all sugars, without exceptions).
So is political will lacking simply because only 4 of CARICOM’s 15 Member States produce sugar? Or is a lack of political will an acceptance that 200 years of decline for Caribbean sugar, accelerating after slavery ended in 1838, simply cannot survive the change in EU sugar policy. Whatever the reason, time is running out. Full political support is crucial. SAC has no option but to sound the alarm bells and insist that the CARICOM single market and economy works for sugar.