How the Chinese are not to blame for Sugar Cane Demise as Sugar Cane replacement needed

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.