ADVISORY CONSULTATION ON ACP SUGAR POLICY AND TRADE
13-14 September 1999 (M'babane, Swaziland)
COMPETITIVENESS OF ACP COUNTRIES
Consultation noted that one of the problems that would face ACP sugar producers as the
benefits of their preferential arrangements in the EC erode, would be the declining
long-run trend in the real world price of sugar. The real price of sugar had been
declining at an average rate of 1.5 percent over the period since 1950. This phenomenon
was common to agricultural products, virtually all of which had a sharper rate of decline.
31. When the trend in world
prices was compared with that in world cane sugar production costs, it was discovered that
the two had moved in parallel since the mid-1980s. This suggested that, in the long run,
cane sugar production operations with lower costs than the average world-wide would be
profitable. Those with higher than average costs would be unprofitable in the long run.
32. The average costs of
production of ACP producers were similar to those in the world as a whole. However,
whereas both African and Pacific ACP producers had typically recorded costs below the
long-run trend in world prices, the costs of production of Caribbean ACP producers had
been well above the trend.
33. Unfortunately, none of the
three ACP regions had managed to reduce its real production costs since the late 1980s.
Also, within the ACP group of producers, the range of production costs was much greater
than in the world at large.
34. Comparing cane and beet
white sugar production costs in the world, it was discovered that cane sugar was
consistently the more competitive of the two.
35. On the technical side,
African ACP producers enjoyed high cane yields per hectare per annum by world standards.
Caribbean and Pacific ACP states yields were close to the global norms.
36. The sucrose content of
Caribbean ACP sugar output was well below that in the other ACP regions. Combining sucrose
with cane yields left the Caribbean and Pacific ACP producers behind most other leading
suppliers, including African ACP producers.
37. All three regions of ACP
producers had small average mill sizes by world standards. Those in the Caribbean were the
smallest of all.
38. Factory recoveries in the
ACP regions were fairly close to the world average. One respect in which the ACP nations
compared poorly with other producers was in the amount of sugar that they produced
annually from each tonne of daily crushing capacity.
39. Among the main conclusions
Cane quality and mill
recovery rates needed to be improved, particularly in the Pacific and Caribbean regions.
The average mill size should
be increased and the utilization of the installed capacity should be raised.