In case you've been under a rock or a really large
sugar cube, King Sugar is dead.
At least that's what the editorial in The Jamaica Gleaner says as noted in by
this reader in “Letter
Of The Day: The Death Of King Sugar”, Published Thursday March 10, 2016, The Jamaica Gleaner.
As if on queue, news broke on Wednesday March 23
2016 that the Chinese-owned Pan Caribbean Sugar Company plans to close
Moneymusk as reported in the article “Gov't
Clarifies Comments On Impending Closure Of Pan Caribbean Factory”,
Published Wednesday March 23, 2016, The
Jamaica Gleaner.
This comes as no surprise to those following the
Sugar Industry, as she's long ceased to be a major employer of Jamaicans. Sugar
hardly bring in any foreign exchange and other options such as co-generation of
electricity are yet to bear fruit as described in my blog article
entitled “Pan
Caribbean Sugar Company Ltd Bagasse Co-Generation and Biofuel Project - How
Bagasse Biofuel and Cooking Oil can reduce Oil Bill”.
With losses of some US$60 million, the Government of
Jamaica has stepped in to take the Clarendon based sugar cane company off the
hands of the Chinese investors as noted in “Gov't
To Help Chinese-Owned Pan Caribbean Sugar Factory”, Published Tuesday March
22, 2016, The Jamaica Gleaner.
However, because there is some 95,000 tonnes of cane
waiting to be reaped, the Government of Jamaica has effectively taken over the
management of Moneymusk for another 3 months as noted in “Gov’t
to Manage Long Pond Sugar Factory for Three Months”, published March 31,
2016 By Latonya Linton, The Jamaica Information
Service.
And as usual, the Jamaicans are quick to blame the
Chinese, claiming they knew nothing about sugar cane farming and made many
mistakes despite getting the sugar cane factories at a great deal as noted in “Blame
On Chinese - Sugar Industry Players Say Foreigners' Lack Of Expertise Failed
Sector”, Published Thursday March 31, 2016 by Andre Poyser, The Jamaica Gleaner.
Chinese
pull out of MoneyMusk Sugar Factory - Americans consuming less Sugar as Health
Consciousness spreads
However, this isn't entirely true.
The Chinese faced incredible difficulty selling the
Jamaican sugar as the high cost of electricity and water made production
expensive.
Worse, First World Countries, the main consumers of
sugar, are now becoming more health conscious, opting to consume products that
contain less sugar as noted in “US
Soda Consumption at Its Lowest Level in 30 Years”, published Mar 30, 2016
by Susanna Kim, ABS News.
In an interview with ABC News, Beverage Digest
editor Duane Stanford points out that healthy is in as anything but sodas is
selling in a bid to avoid consuming sugar, quote: “Soda declines have been
driven by an explosion of beverage alternatives -- everything from energy
drinks to cold brew coffee -- and some consumers’ desire to cut sugar or
artificial sweeteners from their diets”.
According to the Beverage Digest, the 2015 the per
capita consumption of carbonated soft drinks was its lowest level since 1985:
1. 650
eight-ounce servings in 2015
2. 663
eight-ounce servings in 2014
Americans are switching to foods and drinks that
contain less refined sugar such as bottled waters, sports drinks and teas to
quote Duane Stanford: “While soft drink consumption is declining, people are
shifting to non-sodas as evidenced by the accelerated growth of liquid
refreshment beverages like bottled waters, sports drinks and teas”.
The fall is more clearly obvious when you consider
competing brands like Coca Cola and Pepsi that have been affected:
1. 6.6%
decline in Diet Coke’s volume of sales in 2014
2. 5.6%
decline in Diet Coke’s volume of sales in 2015
3. 5.2%
decline in Diet Pepsi's volume of sales in 2014
4. 5.8%
decline in Diet Pepsi's volume of sales in 2015
Overall the beverage market is also seeing a lot of
other healthier beverage products come on stream, such as GraceKennedy's export
of Tropical Rhythms, Coconut Water and Aloe Drink as noted in my MICO Wars blog article
entitled “How
Gracekennedy Aloe Vera Sinkle Bibles American Health Drinks in 2016”.
This leaves Coca Cola and Pepsi with a gradually
shrinking slice of the Beverage Market in the US of A:
1. 33.2%
for Coca Cola
2. 25.1%
for PepsiCo
Good to note all is not lost for Coca Cola and
Pepsi. Both have a portfolio of non-carbonated drinks, which the Americans
perceive as healthier. Coca Cola has Dasani, Vitaminwater, Powerade, Simply
Juices and Minute Made and PepsiCo's brands include Aquafina, Gatorade,
Tropicana and Naked Juice.
Sugar
Cane needs to be replaced - Sea Island Cotton and Sorghum possible replacements
So as much as the Chinese, being management, are to
blame, it's good to note the Jamaicans haven't done much better managing the
Sugar Industry. With word of problems spreading about the Jamaican Sugar
Industry, it'll be hard to find other investors, as sugar itself isn't
profitable.
Benchmark Renewable Energy an ethanol investor, is
coming to plant Sorghum, a potential replacement for Sugar Cane that can keep
the Sugar industry going while making Ethanol as predicted in my blog article
entitled “How
Benchmark Renewable Energy Sorghum to make Ethanol might be perfect sugar
Replacement”.
Options include switching to other crops that will
help to replenish the land, such as Sea Island Cotton, which is more viable in
the long run as noted in my blog article
entitled “West
Indian Sea Island Cotton receives JA$11 million Grant from Japanese Government”.
Other crops abound, such as fruit trees like mangoes
already in demand for export as noted in my blog article
entitled “Jamaica
to export Mangoes to US of A - How 14 Jamaican Mango Orchards qualified to
export Mangoes as Banana's their fruit of Choice”.
Even ginger is viable fast-growing replacement,
being that it is a product that has a rapidly growing market to the point that
Americans interests are coming to Jamaica to farm it for their needs as noted
in my blog
article entitled “doTERRA
and FarmupJamaica – Jamaican Ginger shortfall as Red Stripe Project Grow could
boost acreage for Ginger Wine and Beer”.
Lots of choices exist, but the Ministry of
Agriculture needs to go towards the use of Agricultural towers to maximize the
use of land to make farming more efficient as described in my blog article
entitled “How
IGES Canada Ltd Vertical Hydroponic Aquaponic Towers make low cost Organic
foods”.
Sugar may possibly see a revival, just not with
Sugar Cane.
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