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Supply Chain

Cuba's Sugar Industry Headed Toward Worst Season Ever

The Cuban sugar industry is barreling again toward its worst season ever, according to official media reports and sources, threatening to dent both national pride and economic growth.

The 2022 harvest is set to fall well short of last year's record low, according to official data and two local sugar experts. It is currently running at least 30% shy of the communist-run government's goal of 900,000 tonnes.

Last year's crop of 800,000 tonnes was the worst since 1908, just 10% of a high of 8 million tonnes in 1989.

Sugar was once the pride of Cuba, critical to its rum production and driving foreign exchange and employment in the island's vast countryside.

The government has not been able to finance the sector's needs - including inputs, irrigation and spare parts - due to tough new US sanctions and the coronavirus pandemic.

'Cut The Sugar Quota'

“The government will have to import and maybe cut the sugar quota on the monthly food ration. The bakeries will have to scramble to make sweets,” said one sugar expert consulted by Reuters, who asked to remain anonymous because he was not authorized to speak with foreign journalists.

The government had banked on a small increase in sugar output to meet its goal of 4% growth this year after the economy shrank more than 11% in 2020 and grew 2% last year, reducing resources available to mills and plantations.

In a bid to revive the once iconic sector, Vice President Salvador Valdes Mesa in February crisscrossed the country urging mill workers, farmers and cane cutters to produce more.

The harvest usually begins in November and runs into May, but this year most mills opened in December and early January due to a lack of spare parts and cane.

Structural Problems

"They will not recover the lost tonnage and the most likely scenario is they will fall further behind as the problems are structural and long standing," the local sugar expert said.

Several reports in the official Communist Party daily Granma showed key sugar-producing provinces, including Villa Clara, Las Tunas and Cienfuegos, well behind production goals.

Other reports and local sources indicated output at all 35 of Cuba's sugar mills was behind schedule.

Cuba had earmarked 500,000 tonnes of sugar this year for domestic consumption and planned to sell China 400,000 tonnes, part of a standing agreement with the Asian nation.

News by Reuters, edited by ESM – your source for the latest Supply Chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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