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Sugar Annual - Kingston - Jamaica - JM2022-0003

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Required Report: Required - Public Distribution Date: April 15, 2022

Report Number: JM2022-0003

Report Name: Sugar Annual


Country: Jamaica

Post: Kingston

Report Category: Sugar

Prepared By: Rasheeda Hall-Hanson

Approved By: Frederick Giles

Report Highlights:

Jamaica’s raw sugar production in Marketing Year (MY)2021/2022 was 40,450 MT, eight percent lower
than the previous MY. In MY 2022/23, Post projects 38,000 MT of sugar due to falling production.
Sources claim that issues such as reallocation, the use of previous sugar lands, the high cost of
production, and labor shortages are responsible for the sustained decline. Although production is likely
to continue falling, Post expects that Jamaica will fulfill its export quota to the United States, while also
satisfying local and regional market demands in MY2022/2023.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY
STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
Production

Sugar production in Jamaica has fallen over the last five years. For MY 2020/2021, Jamaica produced
40,450 MT of sugar. Based on the continued decline facing the industry, Post forecasts 38,000 MT of
sugar production from about 479,000 MT of sugarcane in MY 2022/2023. Both sugarcane and sugar
production have decreased over the last 5 years. Between 2017 and 2021, production of sugarcane
dropped from 1,100,000 MT in MY2016/2017 to 499,000 MT in 2020/2021. Raw sugar also dropped
from 87,000 MT in MY 2016/2017 to 40,458 MT in MY 2020/2021 (Figures 1 and 2).

The decline in sugar production has been predominantly attributed to the high costs of production, lack of
labor and reallocation of lands, which were previously allocated to sugarcane production, but are now
being used for housing and other crops. Furthermore, most of the sugar factories have closed operations
in recent years. Currently, there are only two sugar factories producing raw sugar in Jamaica. The
country still does not possess the capacity to process refined sugar, a situation which is unlikely to
change in the short- or medium-term.

The Government of Jamaica continues to provide transportation subsidies to sugarcane farmers who take
their sugarcane crop to factories for processing. The government has also reallocated lands, previously
under sugar production, to farmers wishing to cultivate other crops.

1200 1100
1000
CANE MILLED (1000 MT)

1000
800 816
600 519 499
400
200
0
2016/2017 2017/2018 2018/2019 2019/2020 2020/2021
MARKETING YEAR

Figure 1: Approximate volume of cane milled in Jamaica between 2017 and 2021.
Source: Sugar Industry Authority

100 87 82
RAW SUGAR PRODUCED

80
59
60 43
(1000 MT)

40
40
20
0
2016/2017 2017/2018 2018/2019 2019/2020 2020/2021
MARKETING YEAR

Figure 2: Approximate volume of raw sugar produced in Jamaica between 2017 and 2021
Source: Sugar Industry Authority
Table 1: Sugarcane production for crop year 2020/2021

Factory Company Estate Farmer Total Estate Farmer Total Raw


Area Area Area Cane Cane Cane Sugar
Reaped Reaped Reaped Milled Milled Milled Produced
(HA) (HA) (HA) (MT) (MT) (MT) (MT)
Appleton Campari 0 1,790.00 1,790.00 0 82,667.00 82,667.00 0

Frome Pan 2,566.00 1,145.60 3,711.60 142,018.53 66,384.00 208,402.53 18,307.01


Caribbean

Worthy Worthy 1,875.00 2,481.40 4,356.40 126,754.40 81,395.00 208,149.40 22,143.07


Park Park
(includes
Monymusk
farmers)
* Everglades 0 76.30 76.30 0 0 0 0

GRAND 4,441.00 5,493.30 9,934.3 268,772.93 230,446.00 499,218.93 40,450.00


TOTAL
* Farmer-reaped canes are generally transferred to one of the above factories for processing.
Source: Sugar Industry Authority (Preliminary) 2022

Consumption

In MY2021/2022 local consumption of sugar was 30,000 MT of raw sugar and 60,000 MT of refined
sugar, a total of 90,000 MT. Per capita consumption of sugar fluctuates, but on average, is approximately
82 pounds per person per annum.
The majority of refined sugar consumption in Jamaica is absorbed by the food manufacturing sector.
However, in recent years, the Ministry of Health and Wellness and the Heart Foundation of Jamaica
launched a national campaign warning of the adverse effects of sugar consumption. As such, several
manufacturers have started to make products with lower sugar content. In addition, a tax on sugary
drinks have been recommended to discourage shoppers from consuming products high in sugar. If this
law is passed, it will likely affect the consumption of raw and refined sugar in Jamaica.
Approximately 100,000 MT of molasses and 5,000 MT of raw sugar are used by the spirits industry.
Cane sugar remains the predominant sweetener in Jamaica, although there are other sweeteners on the
local market with minimal demand and market share.
Trade
Historically, Jamaica exported sugar to the European Union (EU) under the European Union Sugar
Protocol (EUSP), which was extended to countries of the African, Caribbean, and Pacific (ACP) group.
Under the EUSP, raw sugar produced fetched a premium price when exported to the EU as well as
importing raw sugar for local consumption at a lower price. The EUSP arrangement was replaced in
2009 by the Economic Partnership Arrangement (EPA), under this agreement, the difference between
world market price and the ACP countries narrowed.
In 2013, the EU revised the Common Agricultural Policy (CAP) which resulted in the removal of the
preferential price that was enjoyed by ACP countries. This led to ACP countries, such as Jamaica,
operating under regular market conditions, including high input costs and low efficiency when compared
to other more efficient sugar markets in the world.
The changes to the EU policy also resulted in a shift in the marketing of Jamaican raw sugar. Currently,
sugar is primarily used for domestic purposes and exported to the Caribbean, and the United States, based
on a pre-determined quota. Some sugar is exported to the EU as well, despite the reduced prices.
Post forecasts 38,000 MT of raw sugar production in MY 2022/2023 as the industry is expected to
continue falling. Although production is forecast lower, Jamaica is expected to fulfill the sugar tariff-rate
quota (TRQ) to the United States for MY 2022/2023. In 2021, Jamaica exported 6,000 MT of raw sugar
to the United States of the 13,796 MT allocated (Figure 3). According to sources, however, the closure of
factories and the decline in crop production may have affected exportable supplies, limiting Jamaica’s
ability to fulfill allocations. The remainder of raw sugar is expected to be consumed locally or exported
to other markets, including to the Caribbean Community (CARICOM) and the EU.

2,750 MT
3,250 MT

Pan Caribbean Worthy Park

Figure 3: Chart showing export quantities of raw sugar from Jamaica


sugar mills to the United States in 2021

Refined sugar is still not produced locally; therefore, Post expects that it will be imported to satisfy local
demand. The importation of refined sugar is expected to remain relatively flat for MY 2022/2023. The
following countries were the top exporters of refined processed sugar to Jamaica in 2021: Guatemala,
Colombia, and Canada.
Stocks
Due to high storage costs associated with storage, approximately 4,000MT of raw sugar is usually kept in
stock by producers. A limited amount of refined sugar is also kept in stock by importers.

Policy
The Ministry of Agriculture and Fisheries (MOAF) governs the policies for the operation of Jamaica’s
sugar industry. The policies address land usage, irrigation, and subsidies. The Sugar Industry Authority
(SIA) is the regulatory body under MOAF, which controls the industry in areas of arbitrations, research,
and development, monitoring and evaluation. The marketing of sugar and molasses is also regulated by
SIA.
The Jamaica Cane Products Sales (JCPS) Limited was a private marketing company created in 1994 to
grant marketing licenses to the factories it represented under SIA due to the fact these factories did not
possess individual licenses to market their own products. After the GoJ initiated changes to the policy,
SIA started to grant licenses to sugar factories directly. JCPS has since become obsolete and closed in
2018.
The Jamaica Country Strategy for the Adaptation of the Sugar Industry (JCS) is the main policy? guiding
the Jamaican sugar industry. The JCS I (2009-2015) was designed to respond to the EU’s policy changes
that regulated sugar export trade in ACP countries. Following revisions to the EU’s policy, the prices
paid for raw sugar to ACP countries fell by 36 percent.
The JCS II (2016-2020), which was updated by the MOAF in July 2019, has three main strategic
objectives:
i. developing and maintaining a sustainable private sector-led sugar cane industry based on
multiple products
ii. strengthening of the social resilience, economic diversification, and environmental
sustainability of Sugar Dependent Areas (SDA)
iii. maintaining progress towards the GoJ’s macro-economic goals

The policy, which is now in effect, has a three-phase approach: transition, transformation, and
consolidation. These policy updates are expected to minimize the risks associated with the industry and
provide an avenue to increase revenue streams. MOAF envisions a revamped sugarcane value chain
where there is expanded focus on diversified by-products beyond sugarcane itself. The Ministry states
that the value-added prospects include the production and generation of energy products such as ethanol,
refining sugar, and increasing the production of premium products such as rum and other alcoholic
products.
Marketing
Currently, Pan Caribbean Sugar Company and Worthy Park are the only two sugar marketing agents in
Jamaica. These companies are licensed by the Government of Jamaica to market their own products
which allows them to set their own prices. Refined sugar is solely imported and distributed by
independent companies to retail markets and by manufacturers of beverages and baked goods.

Table 2: Prices of sugar

Type of Sugar Prices (US$/pound)


Producer to wholesaler Wholesaler/Importer to Retail to consumer
retail
Raw - 0.51 0.79
Refined N/A 0.92 1.30

Tables 3 and 4: Production, Supply and Distribution Tables

Sugarcane, 2020/2021 2021/2022 2022/2023


Centrifugal
Marketing Year Dec. 2020 Dec. 2021 Dec. 2022
Begins
Jamaica USDA New USDA New USDA New
Official Post Official Post Official Post

Area Planted 14 14 14 14 0 14
(1000 HA)
Area Harvested 11 11 9 9 0 7
(1000 HA)
Production 596 596 515 515 0 479
(1000 MT)
Total Supply 596 596 515 515 0 479
(1000 MT)
Utilization for 588 588 507 507 0 471
Sugar
(1000 MT)
Utilization for 8 8 8 8 0 8
Alcohol (1000
MT)
Total Utilization 596 596 515 515 0 479
(1000 MT)
Sugar. 2020/2021 2021/2022 2022/2023
Centrifugal
Marketing May 2020 May 2021 May 2022
Year
Begins
Jamaica USDA New USDA New USDA New
Official Post Official Post Official Post
(1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT) (1000 MT)
Beginning 4 4 4 4 0 4
Stocks
Beet Sugar 0 0 0 0 0 0
Production
Cane Sugar 48 48 42 42 0 38
Production
Total Sugar 48 48 42 42 0 38
Production
Raw Imports 0 0 0 0 0 0
Refined Imp. 60 60 60 60 0 60
(Raw Val)
Total Imports 60 60 60 60 0 60
Total Supply 112 112 106 106 0 102
Raw Exports 13 13 12 12 0 11
Refined Exp. 0 0 0 0 0 0
(Raw)
Total Exports 13 13 12 12 0 11
Human 95 95 90 90 0 87
Domestic
Consumption
Other 0 0 0 0 0 0
Disappearance
Total Use 95 95 90 90 0 87
Ending Stocks 4 4 4 4 0 4
Total 112 112 106 106 0 102
Distribution
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