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Economy & Business - August 2003

CUBA: Better tomorrows

The sugar minister, General Ulises Rosales del Toro, claimed that the sugar harvest for 2003/04 would be much better than recent harvests. It needs to be. The government has finally come clean about the 2002/03 harvest. This amounted to just 2.15mt of sugar. The crop was the lowest ever recorded and well below even the gloomiest estimates from independent analysts. The 2001/02 crop was 3.6mt. 

Whether the next harvest will be much better must be moot. The government extended the 2002/03 harvest into late June. Traditionally, the harvest should end in April. The longer the harvest goes on the less time there is to prepare for the next one. To be fair, the start date for the harvest is being put back: General Rosales del Toro does not expect the 2003/04 harvest to start before December. He blamed poor management, lack of finance and heavy rain for the poor result in 2002/03. 

One of the industry's big problems is that the weak international price for sugar means that the industry is barely profitable. Rosales del Toro claimed that some areas were managing to produce 54t of cane per hectare. The crucial issue, however, is what the sugar yield from the cane is. Usually, in Cuba it is around 10%. The government admits that it costs around 359 pesos (US$359 at the official rate or US$13 at the blackmarket rate) to produce a tonne of sugar. The government wants to get the cost down to 260 pesos per tonne.

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