IUF logo; clicking here returns you to the home page.
Uniting Food, Farm and Hotel Workers World-Wide

The Sugar Worker, May 2005. News from the Sugar Sector.

Posted to the IUF website 01-Jun-2005

Share this article.

Note to our Readers:
The IUF Sugar Workers' Network Web Site is available at http://www.iufdocuments.org/sugar/
Affiliated union can request a password to the site by sending an electronic message to Jorge Chull�n.

The Sugar Worker
Information and Analysis for Unions in the Sugar Sector
Volume VII, Number 5
May 2005


European Union: Italian Unions Call Strike Protest on 1 June

Italian sugar unions FAI, FLAI and UILA called an 8-hour of strike on 1 June to attract attention to the problems facing the sector and to demand the modification of the reform proposal announced by the European Comission. The reform would cut jobs in Italy, said a spokeswoman for the UILA-UIL, adding that if not modified it will mean rising sugar imports in the EU and the closure of about 30 percent of the European sugar factories. There are some 77,000 workers in the Italian sugar sector. The unions FAI, FLAI and UILA ask for a revision of production quotas assigned to each EU country, that national aids for the South not to be abolished, and that the EU create a European fund to finance the reorganisation of the sugar sector. (Based on a report by AGI, 30 May 2005.)

European Commission Toughen Reform Proposal

Meanwhile, a document in preparation by the European Commission calls for a harsher and quicker sugar reform than the one proposed in June 2004. It was said that on 22 June, the European Commission would announce a proposal to reduce the support price for white sugar in 39 percent, and the minimum price for beet in 42 percent over, a two-year period. In comparison, the proposal of June 2004 called for a 33 and 37 percent cut respectively, over three years.

The new reform proposal is related to the decision of the Appellate Body of the World Trade Organisation (WTO) of last month confirming that the EU illegally subsidises a significant portion of its sugar exports. The WTO gave the EU a period of up to 15 months to comply with international trade regulations, which coincides with the timetable of the new proposal for reform and the expiration of the current sugar regime in June 2006.

In the new reform proposal, the Commission has dropped the controversial transferability of production quotas, which would have allowed quotas to be sold across countries in the EU-25. The new proposal calls for the EU to buy back the sugar quotas during a four-year period, and, if needed, to make quota reductions compulsory in the fifth year. The June 2004 proposal called for a phased-in cut of 2.8 million tonnes in production quotas.

The agriculture ministers of the 25 countries of the EU have still to agree to the reform, while the Commission has said that it expects to have the reform approved by November, in time for the WTO ministerial meeting in Hong Kong in December this year.

Trinidad: Production Plummets in 2005

On 25 May, the Sugar Manufacturing Company Ltd. (SMCL) announced that the 2005 harvest would achieve only 33,500 tonnes, well below the 50,000-tonne goal set at the beginning of the year, and less than half of the production levels proposed by the government when it dismantled Caroni (1975) Ltd. two years ago.

The poor production level, said SMCL officials, is due because a shortfall of almost 200,000 tonnes of cane, from the anticipated 730,000 tonnes, and the low quality of the cane delivered. They did not elaborate, however, the reasons for these shortcomings in the basic running of a sugar industry: volume and quality of cane. Trinidad will not be able to cover the quota it has in the European Union for 45,000 tonnes of sugar.

In early January, at the start of the harvest, SMCL officials said that the country would not shipped her sugar quota to the United States of about 7,000 tonnes because "unfavourable prices" in that market. At the same time, they said that the company would receive about 600 euros (USD 850) per tonne of sugar sold to the EU, and would cover domestic consumption with imported raw sugar (for refining) from Guyana and Belize, which could be bought at USD 245 per tonne.

Notwithstanding the lack of cane - and news that cane fields are not renewed -, on returning from a recent visit to Brazil, SMCL officials announced that the company would explore ethanol production. It was not clear whether that ethanol would be produced from domestically grown cane or from Brazilian feedstock.

Meanwhile, the fate of Caroni's assets continues to be a matter of discussion. In mid May, the company held auctions in the Ste Madeleine, Brechin Castle and Woodford Lodge estates, reported the local press, raising some 4.5 million Trinidadian dollars (USD 800,000) through the sale of "idle stocks". New auctions are expected, as some of the equipment loaned to cane farmers will be returned at the end of the crop. At least 141 bungalows, property of Caroni, are also to be auctioned.

Cuba: Lowest Production in a Century

With only one sugar producing province, Villa Clara, completing plans, Cuba ended its 2005 harvest with about 1.3 million tonnes of sugar, compared to last year's 2.52 million tonnes. This made the 2005 short-harvest the smallest in one hundred years, a product of the worst drought experienced by the island in several decades, in combination with the lack of agricultural inputs and incentives to cane growing. Local analysts said that production might improve next year because of rains seen this month of May and increased importation of agricultural inputs, although reaching 2 million tonnes of sugar might not be feasible. Cuba had intended to produce between 1.5 and 1.7 million tonnes of sugar this year.

Beyond the impact of the severe drought, which destroyed or severely damaged cane fields, Cuba officials appear willing to downgrade the importance of sugar in the country's economy in their public speeches. (Tourism has, after all and for some years, taken over the position as the country's main foreign exchange earner.) In April, President Castro said that sugar belongs to the "era of slavery" and that the island would never depend on sugar again. He pointed to the industry's several drawbacks, including high consumption of fuel. He added that sugar, once the country's main support "is now its source of ruin." Cuba has been importing sugar from Colombia and Brazil to cover part of the domestic consumption.

Sudan: Investments in White Nile Sugar

In early May, the Sudanese Council of Ministers approved a USD 71 million loan agreement with the Arab Fund for Economic and Social Development to finance the White Nile sugar project. The project aims at producing some 340,000 tonnes of sugar, as well as other crops, and has a total cost of USD 409 million. The financing from the Arab Fund will be allocated to irrigation infrastructure, it was said.

Groups from Sudan, Egypt, and Tunisia are contributing to this project, in a country that could become an important sugar player in Africa and worldwide. The country produces close to 750,000 tonnes of sugar per year and the new investments could increase production significantly in the near future, local news sources said.

IUF Caribbean: Sugar & Banana Meeting in Jamaica

From 16 to 18 May, thirty delegates (9 women) from the sugar and bananas sectors in Jamaica met to discuss trade issues and held detailed sessions on health and safety issues and on Gender Perspectives. Delegates were members of the UAWU and BITU, the two IUF-affiliated unions organising in the agricultural sector. It was also the first time that delegates from sugar and bananas got together in an IUF seminar.

In the seminar's first session, the delegates heard presentations by Ambassador Derrick Heaven, chairman of the Sugar Industry Authority, and by Dr Marshall Hall, from the Jamaican Producers Group, the country's leading banana producer/exporter. Both presenters outlined the current trade negotiations with the European Union. The presentation of Mr Heaven was of particular interest because the same day the Brazilian Foreign Minister visited the country and a memorandum on cooperation and technical assistance in ethanol and sugar production was signed. An important issue for a comprehensive development of the cane-based sector in Jamaica would be the use of domestically grown cane for the production of ethanol, instead of using mainly Brazilian feedstock.

Mr Robert Chung, Deputy Director of Occupation Health and Safety in the Minister of Labour, and Mr Wycliffe Matthews, BITU Deputy Island Supervisor, dealt with Health & Safety issues. This is a topic that has taken a central stage in the sugar workers' concerns, in response to the deaths of two workers while working in the factory in March and April this year. Mr Matthews spoke about the role of management, union and union delegates, and individual workers in making the workplace a safe place, while Mr Chung made a thorough presentation on the labour legislation as it pertains to health and safety, emphasising the need to create a new culture of safety in the workplace.

In the third day of the meeting, Ms Judith Wedderburn and Dawnette Hinds-Furzer from the Jamaican office of the Friedrich Ebert Stiftung (FES) conducted a workshop on Gender Perspectives, with emphasis on health and safety in the workplace and HIV/AIDS programs. Involving the active participation of delegates with role-playing sketch, comments from delegates and a general discussion through questions/answers, the session was, for many delegates, the first time they had been exposed to a systematic discussion on Gender.

The meeting passed two resolutions, one called the government for a prompt and thorough investigation on the death of two sugar workers (Long Pond in March, Appleton in April) and to implement measures to avoid similar incidents in the future, and a second on passing the national health and safety regulations and ratifying ILO Convention 184 on Safety and Health in Agriculture.

In the context of the seminar, the second leg of a trade union exchange in sugar between Jamaica and Guyana was completed. Two delegates from the Guyanese unions, GAWU and NAACIE, attended the seminar, visited the Monymusk and Appleton sugar estates, and met with leaders of the BITU and UAWU.

Health and Safety

United Kingdom: British Sugar Fined for Factory Explosion

On 25 May, the Norwich Crown Court fined British Sugar with 250,000 British pounds (USD 455,600) and ordered to pay 90,000 pounds (USD 164,000) in costs because of an explosion at the Cantley factory that happened two years ago. As a result of the explosion, Eddie Osbourne, a worker under contract, suffered a fractured skull and the loss of the sight in one eye. He was hit by a door blown off its hinges when the explosion occurred. Mr Osbourne would also be entitled to an insurance settlement for his injuries.

This is the fifth instance in five years when British Sugar has been found guilty of breaching health and safety regulations. British Sugar being such a large company, said the Norwich Court, "really ought to feel a significant sense of embarrassment to be in breach of regulations." The Court's decision came three months after British Sugar was fined 400,000 pounds and 31,457 pounds in costs for health and safety breaches at the Bury St Edmonds factory, which resulted in the death of one worker. (More information in Sugar Worker, February 2005.)

Commenting on the case, a representative of the Transport & General Workers' Union (T&G), which organises workers in British Sugar, said that there are two more cases on breach of health and safety regulations going to court. Both are accidents at the Allscott factory that resulted in the death of a worker in each occasion. One relates to a worker who fell out from a cherry picker; the other, a worker who was cleaning the front of a boiler and was hit by high-pressure water when a pipe broke.

Social Security

Jamaica: Widow Struggles to Support Family

Decent Jobs also mean Social Security, states the tripartite International Labour Organisation (ILO). Social Security refers to the protection of people in the event of losing income and it has to be understood at different levels: from providing basic needs (e.g. adequate nutrition, primary health care) to protecting individuals against contingencies (sickness, accidents, protecting vulnerable groups like widows and children) to protection against calamities that destroy property and productive resources (floods, droughts).

Lloyd Campbell, sugar worker, died on 21 April at the Appleton factory (see report in Sugar Worker, April 2005 issue), in what appeared to be a blatant breach of health and safety procedures in the factory. The tragedy does not end there, unfortunately. An article published by the local paper The Observer, describes the current situation of the young widow and three orphaned children (a 5 years old, and four-month old twins). The 29-year old widow is struggling to provide for her children. "Were it not for the generosity of Campbell's mother and a sister of his who resides overseas, carrying out her responsibility to her children would be virtually impossible," says the paper. While support from extended family members is commendable in any society; it is not Social Security. The bereaved family of Mr Campbell, who received support from the company for his burial, has been left forsaken now that their father and income earner is gone. The young widow has received word from the company that their children would be provided for until they are 18 years old, said The Observer, but she is still to meet with a representative from the company to see the actual terms of such support. In the meantime, the paper reports, she was waiting to receive her husband's last pay cheque.
Readers can read the full article here

Company News

Brazil: Cargill in a Joint Investment in A�ucareira Corona

In late May, the US-based agribusiness giant Cargill announced a joint venture to acquire A�ucareira Corona's Bonfim and Tamoio mills, the company's lands, long-term leases and costumer portfolio. The operation is estimated in USD 150 million, and would the first time that Cargill enters the Brazilian sugar and ethanol production. The company said that after analysing the market, it has made the "strategic decision" to become more active in the Brazilian sugar and ethanol sector.
The Bonfim mill (Guariba) produces some 375,000 tonnes of sugar and 190 million litres of alcohol per year, while the Tamoio (Araraquara) is listed with a yearly capacity of 175,000 tonnes of sugar. Both mills are located in the state of Sao Paulo. There are some 7,000 workers employed in the two mills.
Although the terms of the operation were not disclosed, it is reported that Cargill will have a majority control over the company. Cargill's partners are Crystalsev and Fluxo. Crystalsev and Cargill have joint ventures in facilities for sugar and ethanol exports in the ports of Santos and Guaruj� in Sao Paulo.

Cargill is the third foreign company investing in the production sugar and ethanol in Brazil, following the French Tereos (merger of Union SDA and B�ghin-Say) and Dreyfus, the French trading house.

The acquisition of A�ucareira Corona coincided with the company's fortieth anniversary of activities in the country. According to local papers, Cargill started in the field of hybrid corn seeds and has developed into a diversified business with about 170 locations in 18 states. Its businesses now cover several sectors like agribusiness, risk management, real estate, capital markets, and financial services among others.

Lithuania: Danisco to Consolidate Production

On 17 May, a press release by Danisco, the Danish food conglomerate, said the company would close the Kursenai factory, one of the three factories it owns in Lithuania, as from the 2005 beet campaign. Production would be transferred to the Panevezys and Kedainiai factories, which have been upgraded to process the extra beets from Kursenai.

According to the company, a comprehensive social program is in place to support about 130 employees of Kursenai who would lose their jobs. The program includes providing employment while the factory is dismantled, training opportunities, financial assistance, and aid for business start-up. To minimise the impact on growers, the company would continue operating the beet reception centre at Kursenai during the 2005 campaign, as an alternative to delivery to the Panevezys factory. Including Kursenai, Danisco owns three of the four sugar factories in Lithuania. Last year, Danisco's sugar production was 104,000 tonnes, surpassing its individual 82,000-tonne quota from the country's total quota of 103,010 tonnes. Danisco first entered the Lithuanian sugar sector in 1998.

Southern Africa: Strong Rand, Illovo Profits Down

Illovo Sugar reported a decline of 21 percent in revenues and 44 percent in operating profits for the financial year ending 31 March 2005, with the main factor being the strength of the South African rand (and other national currencies of the countries where it operates) against the US dollar.
Contribution to operating profits by areas of operation was 68 percent from sugar production, 16 from cane growing, and 16 from downstream products. In terms of countries, operations in South Africa contributed 13 percent to the operational profits, Malawi 34 percent, Zambia 38, Swaziland 5, and Tanzania 17 percent. Negative performance occurred in Mozambique and the US. In the latter, Monitor Sugar was sold before the 2004 beet campaign started.

Sugar production in the year was 1.78 million tonnes and cane production reached 5.3 million tonnes, levels lower than the previous year because of the sale of two South African estates (Gledhow and Umfolozi) and Monitor Sugar in the US, and to adverse weather conditions in South Africa.
Interestingly enough, the company sells most of its sugar (70 percent by volume and 85 percent by value) in "stable domestic markets or premium priced export markets," and most governments in the African countries where it operates are taking a firmer position against illegal imports. A matter of concern for the company is that the protection given by the Tanzanian government to domestic sugar refiners remains at a level that makes imports from the world market attractive to local industrial users.

Illovo Sugar is also following closely and actively participating in the international sugar negotiations, in particular around access to the European Union market. The company understands that increased access for the Least Developed Countries (LDCs) "at remunerative prices" would provide good opportunities for sugar expansion in most of the countries where the company operates: Malawi, Zambia, Swaziland, Tanzania, and Mozambique. The first four are also ACP Sugar Protocol countries. In fact, the company's director for African operations chairs an LDC sugar lobby group.

Meanwhile, Zambia Sugar Co., an Illovo Sugar subsidiary, reported a net profit of USD 19.22 million in the year ending on 31 March 2005, compared to USD 20.7 million in the previous year. Eroded profits, said a company official, would not affect dividends to shareholders. He also said that lower profits were result of an increased competition in the domestic market by the newly established Kafue Sugar Co. Zambia Sugar produced some 230,000 tonnes of sugar in 2004, also processing cane from independent growers.