The newly-announced price of sugar in the European market threatens the production of the commodity in Mauritius, where it contributes 6 per cent to the economy and is very important in the production of renewable energy, ethanol, among other by products.
”We do not want this industry to collapse,” Mauritian Ago-industry and Food Security Minister Satish Faugoo told PANA Tuesday in an interview, following the announcement of a cut in the price of sugar on the European market from about US$515/ton to about US$465/ton for the 2014 and 2015 crops.
”Sugar production costs has already reached the US$520/ton,” the Minister said.
According to the Minister, the price slash follows the announcement of the abolition of quota for beet sugar producers in the European Union from 2017.
”BRICS countries (Brazil, Russia, India, China and South Africa) having an important stock of sugar have thus flooded the world market with their sugar, causing the price to fall. This represents a big danger for our industry,” he emphasised.
Before the price cut, numerous small and medium farmers in the island had already started abandoning their land for several other reasons: lack of manpower, high costs of inputs and also problems linked to heritage and industrial and infrastructure development.
A total of 11,500 hectares of land have so far been abandoned by small and medium farmers since 2008.
”We do not want sugar land to be abandoned more so after we have invested in reforming the industry since 2008. It will threaten our industry and the 100,000 tons of sugar produced by the 18,000 small and medium farmers annually,” the Minister said.
Mauritius has been producing about 410,000 tons of sugar annually in the last few years, compared to 550,000 tons a decade ago.
According to the minister, the only way forward is the regrouping of small and medium farmers because they are vulnerable.
”This will also help them to reduce their production costs and improve on their productivity,” he said.
Meanwhile, the Minister has indicated that the government will help small and medium farmers by giving each of them US$70 for each ton of sugar they export during the 2004 and 2015 crops.
PANA reports that the Mauritian sugar industry has gone through some difficult stages lately following the 36 per cent price cut in 2007 and the end of the Sugar Protocol in 2009.
The Protocol made it possible for the island to sell its sugar at a guaranteed price for almost four decades.