The Council of Ministers of Cuba has approved a significant increase in the maximum collection per metric ton of sugar cane, as established in January 2022. The new maximum collection rate has more than doubled from 800 pesos to 2,087 pesos per metric ton. This decision was published in the Official Gazette of the Republic and empowers the President of the AZCUBA Business Group to establish prices based on quality, with retroactive application to operations from November 25, 2023.
Lourdes Castellano Jiménez, the director of International Relations, Business and Foreign Investment at AZCUBA, stated that the increase in sugarcane prices is a result of recognizing rising fertilizer and input expenses at current prices, as well as updating the amounts of advances and salaries paid to producers. Additionally, the prices approved for cane and the marketing of sugar, honey, and alcohol will not increase for the rationed family basket or sectors with direct impact on the population.
Despite the approval of the new pricing agreement, the state sugar monopoly has acknowledged that the 2023-2024 sugar harvest is occurring in a complex scenario, characterized by low agricultural and industrial yields due to difficulties in the supply of necessary resources and inputs, which have been attributed to the direct effects of the US embargo.
In response to the challenges facing the sugar industry, the government has introduced a program aimed at saving the industry, with a focus on increasing sugarcane planting for future harvests. The state sugar monopoly has also expressed its commitment to applying a new financial economic model for marketing and price approval, which will allocate increased income from sales of molasses and alcohols to the payment of debts and the compensation of unprofitable activities.
Despite the challenges, the Cuban Government aims to produce over 400,000 tons of sugar in the current harvest. However, the industry’s struggles were highlighted in the 2022-2023 harvest, which resulted in the worst sugar contest in history, affecting the consumption of the basic basket of Cubans. These challenges signal a stark contrast to Cuba’s history as the world‘s leading sugar exporter. As the industry grapples with difficulties, it has turned to Ethiopia in an effort to keep afloat.