Business & Economy

Cuba, in tough battle to recover its key sugar industry

By Laura Becquer

Havana, May 4 (EFE).- The former leader in the world sugar market, Cuba is far from recovering the huge production volumes of former years in an industry considered to be the country’s economic engine but which has not managed to take off again since it collapsed during the 1990s.

Of the 156 sugar plants operating before 1959, just 56 remain and only 38 of them are processing the 2020-2021 harvest. And the 5.6 million tons of sugar collected during the year in which the Cuban Revolution triumphed, or the 7-8 million tons during the industry’s best years between 1970 and 1989, have plunged to only a little over a million tons projected for the current harvest.

The iconic Cuban sugar industry has been affected over the last six decades by the US financial and trade embargo – losing some $125 billion, according to Havana’s estimates – and the resulting impossibility of accessing the US market.

Add to that the prevailing technological obsolescence, the lack of fertilizers and fuel, the scanty available financing and other factors, all of which are putting the brakes on development of a sector that’s strategic because of the foreign currency it brings in from exports of sugar, alcohol (particularly rum), energy (ethanol) and other derivatives.

And all this is compounded by the frequent paralysis of operations at the plants and the low quality of the raw material.

To export sugar, and to import ingredients or spare parts, Cuba must somehow get around the embargo, the first vice president of the state-run Azcuba group, Jose Carlos Santos, told EFE.

Add to that the impact of hurricanes such as Irma, which cut short the slight growth the sector had experienced in 2011, after suffering the worst harvest in 105 years the year before: barely one million tons.

That 2017 hurricane wiped out more than 430,000 hectares (over a million acres) of sugar cane and wrecked the roofs and buildings of about 20 factories.

As a result, Cuba has produced only 700,000 tons of sugar per year since 2017, Santos told reporters.

The target of 1.2 million tons will not be achieved during the current processing phase that began last December and was supposed to conclude in late April but will be extended as long as the May rains don’t bring the work to a halt, the director said.

Sugar used to provide 80 percent of the island’s export earnings during the 1950s, the principal market being the US, for which a preferential quota was always set aside.

When the Revolution triumphed in 1959, the sugar plantations were ultimately nationalized, although at first they remained in the hands of their original owners. The aim was to diversify Cuba’s monoculture economy and end dependence on US purchases, although Havana’s last export shipment to the US – 1.9 million tons – came in 1960, when Washington ended the preferential purchase quota as one of its first economic sanctions on the communist island.

After Cuba nationalized the sugar plants and with Havana under pressure from additional US punitive measures, the Soviet Union made a commitment to buy a large portion of the Cuban harvest at preferential prices up until 1970.

But with the fall of the USSR in 1991, Cuba was without a main market for the crop and five years later the harvest had plunged to 4.3 million tons. The US Helms-Burton Act tightened the embargo by penalizing third parties investing in properties on the island confiscated by the Havana regime, including the sugar industry.

In 2002, Fidel Castro announced a restructuring of the sugar industry by closing 70 percent of the plants, reducing production capacity to just half of what it was and shifting 60 percent of the sugar cropland to other production.

After world prices rose again in 2006, however, Cuban authorities adopted the strategy of trying to produce more sugar, noting that the sugar industry is the backbone of the island’s economy.

EFE

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