KINGSTON, Jamaica CMC – The Italian company, Eridania, is no longer interested in buying the government-owned sugar estates, Prime Minister Bruce Golding has said.
He told Parliament Friday that the company is asking his administration to consider the continuation of a forward-sale arrangement that now exists.
“They have not been able to establish that that investment would not be able to provide them with the 200,000 tonnes of sugar that they need,” Golding said, adding “it would require significantly more investment and would completely disturb their calculations in terms of the return of investment that is required”.
In July, the Government entered in an arrangement with Eridania whereby the Italian company agreed to provide US$15 million in interim financing as a pre-payment for the 79,000 tonnes of raw sugar, expected to be produced at the island’s three state-run sugar estates.
The Golding administration has said that it does not intend “to stay in sugar” and is seeking to sell off the factories and estates in its possession.
Meanwhile, a senior official of the Jamaica Cane Product Sales (JCPS) that markets sugar produced locally says the country will earn a projected US$20 million less in revenue from sugar exports this season.
JCPS general manager Karl James said that sugar sales last year reached US$75 million, but that the drop in sales this year is due to decision taken by sugar manufacturers to satisfy the local market.
“Last year we exported about 121,000 tonnes of sugar but this year we are going to export less in order to supply the domestic market more,” James is quoted in the Observer Newspaper on Saturday.
During the 2008/2009 crop, the country sold the bulk of the sweetener to England and the United States and James said that the industry has set a target of 148,000 tonnes for the 2009/2010 crop, which began just over two weeks ago.
The amount, James said, represents an increase in production of almost 12,000 tonnes over the previous crop and that the country is committed to selling 79,000 tonnes to Eridania.
At the start of the sugar crop this year, Agriculture Minister Dr Christopher Tufton said he was confident that the target would be achieved.
“We do have an interim arrangement that the 79,000 tonnes that is promised to Eridania will be met in the first instance by the publicly-owned estates, but there is a contingency to take from the privately operated estates … in order to ensure that that target is met,” Tufton said.
