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SUGAR HARD TIMES

SUGAR HARD TIMES

SUGAR traditionally dominated the agricultural sector with output peaking at 8m tonnes in the 1970s. After 1990, output dropped to 4m tonnes until 2002, when a restructuring plan was implemented to close half of the mills and transfer to other uses half of the agricultural land under sugar cultivation.

In the years following the restructuring output has declined faster than was anticipated belying hopes of obtaining higher yields though concentrating on the better areas. There was, however, a significant fall in input expenses. Production figures are: 2002/32.1 million tonnes
2003/41.5 million tonnes
2004/51.3 million tonnes
2005/61.2 million tonnes *
2006/71.5 million tonnes +

* based on initial reports
+ forecast

Contribution to Export earnings
Sugar exports are still an important export earner for Cuba contributing an estimated US$ 150 million in 2005, and total earnings of US$280 million in 2006 (approx 400 million tonnes of the total harvest was used for domestic consumption).

Cuban Sugar production and prices
During 2005 international sugar prices joining the general commodity boom rose to reach an 11 year high of 15cts/lb (US$ 330pmt) at the end of the year, representing a 66% increase from 2004.

Reversal of fortune for sugar
Cuban Sugar Minister Ulises Rosales del Toro recently said Cuba planned to boost output in 2007 and beyond by increasing acreage and the use of fertilizer and herbicides, by purchasing new equipment, and reopening some 30 mills. A newly formed state enterprise, Zerus, is now actively seeking foreign investment partners for both cultivation and processing.

In the medium–term there is a interesting opportunity for Cuba to develop a significant ethanol industry. This would present a good opportunity for co–operation agreements with Brazil which is the world leader. However, this would require very significant levels of investment (estimated in the billions for large–scale production).
In the whole national network of 11,000 km there is more mileage of railway track dedicated to the sugar industry than any other usage. February 2007  

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