Reply to "Rice exports bags US$10M more in bumper first crop"

Below is a rough analysis regarding my assertion that Guyana's sugar exports are a net FOREX loser absent access to (expiring) preferential market pricing:

first see

Guysuco 2015 Annual Report @p.4

from Table, GuySuCo exported sugar (mostly preferential markets) in 2015 at an average of $US347/Tonne

in the previous 9 years (mostly preferential markets) sugar was exported at an average of $US557/Tonne

from Table, Cost of Materials and Services, i.e., FOREX (incl. fuel, fertilizer, machinery, etc.) run on average 35-40% of costs during 2006-2015

Doing the math, e.g., for 2015, we have "Cost of Materials & Services" accounting for approx. $US59 million vs. FOREX sales of US$76 million @ $US347/Tonne . . . however, @ the world price then hovering around $US265/Tonne, the FOREX loss would have been approx. $US3 million . . . essentially a wash. For the previous 9 years, the losses would have been worse

f.o.b. world market price for bulk sugar is now around $US277 per Tonne and dropping

i also cite Hewitt's 2001 analysis of the industry circa 1996 . . . this is instructive:

"These productivity differentials translate into substantial differences in international competitiveness. Domestic resource cost (DRC) analysis on the sugar industry in Guyana, offers some indication as to the present viability of the industry (and that of the different estates within the industry) in the context of different export markets.23  DRC calculations provide an empirical measure of competitiveness (from the social point of view of profitable use of domestic resources, rather than the private concept of profitability). According to these criteria, Angel (1996) finds that both groups of estates are competitive in the EU markets (SP and SPS) but only the Berbice Estates are competitive in the US preferential market. Neither Demerara nor Berbice Estates demonstrate a competitive advantage, in the protected CARICOM market or the world market. In other words, production for the latter two markets costs the country more in terms of foreign exchange than it earns in export revenues."



Photos (1)