Local sugar producers will receive a 115 per cent increase on sugar prices for the 2011/2012 crop, even as plans for the industry’s 100 per cent privatisation are finalised.

Agriculture minister Robert Montaque said the agreement, which was hammered out by private manufacturers, comes on the heels of the divestment of the three remaining state-run sugar factories — Monymusk, Frome and Bernard Lodge — which the minister said is still on schedule despite rumours stating otherwise.

He praised the initiative taken by manufacturers who combined efforts in negotiating the price of sugar for the upcoming crop year.

“In their wisdom, the existing private manufacturers, with the consent and agreement of COMPLANT, who would have been in control of Frome, Monymusk and Bernard Lodge, post August 15, 2011, after negotiating with a number of sugar refineries in Europe, signed an Agreement with ED & F Man Sugar Limited for the supply of some 80,000 tonnes of sugar for the 2011/2012 crop year, at a price of US$936.98 per tonne”.

Jamaica now has two contracts to export sugar, one with Eridania Suisse of Italy (79,000 tonnes at EU$ 333.20 per tonne) and the other with Tate and Lyle of Britain (100, 000 tonnes at EU$370 per tonne). These were negotiated by SCJ Holdings Limited, the current operators of the three remaining Government estates.

It is to be noted however, that this arrangement with ED & F Man Sugar Limited will only last for a year, as was underscored by one manufacturer present at the press conference held at the ministry’s offices. The manufacturer implored his colleaues and sugarcane farmers to wisely invest earnings they make in the lucrative year ahead, as the subsequent years will see a substantial reduction once the agreement ends.

With regards to the divestment plans, Montaque said that the expected handing over scheduled for August 15, 2011 is still on track.

“We will be faced with a scenario where the industry will be completely in private hands for the first time in many many years. This prospect certainly has implications for the marketing of Jamaica’s sugar, going forward,” said the minister.

The Government had last year signed an Agreement with COMPLANT of China for the divestment of its three sugar estates by April of this year.

The matter of a sugar shortage was also queried to which Montaque said there are adequate supplies of sugar in the system.

Additionally, Jamaica Cane Products Sales general manager Karl James said there are suspicions that some distributors are hoarding the product which would explain any shortfalls locally. He said this has further implications for consumers as routine surveys, conducted by himself and his team, have found that retailers are marking up the product by as much as 52 per cent.

This is needless, said James, as the country has its own supplies — and guarantees by Guyana to supplement such — to last until October, by which time they will have made arrangements to continue meeting local demands for sugar beyond that date.

Jamaica’s sugar industry, and that of the Caribbean, has struggled to be competitive since the removal of certain access and price preferential arrangements with Britain in the mid-2000s.