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Sugar contraband to Guatemala, Mexico increased in 2023; causes shortages at stores, supermarkets

Posted: Wednesday, October 18, 2023. 6:18 pm CST.

Photo Credit: Aaron Humes

By Rubén Morales Iglesias: If you’ve been to the store lately and have not been able to get your usual supply of sugar, you can blame the increased illegal export to Guatemala and Mexico this year. Or rather, you can blame the ‘contrabandistas’ of Belize’s sugar. The illegal activity, which is filling the pockets of a few, is causing occasional shortages at stores and supermarkets around the country.

According to Marcos Osorio, Chairman of the Sugar Industry Control Board (SICB), approximately 15,000 tons of sugar (12,000 of plantation white sugar and 3,000 tons of brown sugar), are earmarked for the Belize market annually, but heavy selling across the blind spots along the Belize border with the neighbouring countries is putting a strain on the local market.

“I can say that there is not necessarily a shortage of sugar,” Osorio told Breaking Belize News.

“What is happening is that the volume of sugar that is moved on a monthly basis for the local market, part or a significant part of that sugar is finding its way into Guatemala mostly. We also know that some are moving into Mexico because prices across the border in Guatemala and Mexico are far much higher than the prices we have in Belize for our local sugar.

“That consumers are not able to get sugar at the usual place where they usually go and buy at the supermarkets, the shops and so on, it’s not because there is a shortage, but it is a ‘false’ shortage regarding the sugar not being made available. The distributors or those that have the concessions to buy the sugar from BSI and distribute it across the country, they are doing so but somehow that sugar is finding its way into Guatemala and Mexico. That then creates a shortage or a scarcity of supply on the shelves of the businesses.”

Sugar cane field in Northern Belize. (Photo courtesy of Marcos Osorio)

In the backdrop of a sizable global decrease in sugar production, Belize’s lower controlled prices for white and brown sugars, maintained like that to benefit the Belizean consumer, have exacerbated the illegal flow of the sweet commodity to the neighbouring countries to our own detriment.

“Yes, to a certain extent our prices are far lower, the reason why we are experiencing the present situation, and it happens every now and then; but this year, the volumes being moved across are far higher than what we have seen in past years,” Osorio said.

“Generally, there was a huge 25 to 30% decrease in production of sugar globally. That’s the reason why today we are seeing prices of sugar in the world market so high. We wish that also those prices are reflected and felt in the pocket of our cane farmers.”

Osorio said that apart from consumers not getting their usual supply, the sugar cane farmers are getting it from both ends as they are not benefiting more from the higher global prices nor from the illegal sale either.

“It is very unfortunate that it is those intermediaries that are moving the sugar into Guatemala and Mexico that are making the money out of our local sugar that could be for our local market, but it’s not necessarily reaching to the pocket of our hard-working cane farmers.

“It is an informal export, and the industry loses in that aspect because we are not getting the price that is being paid across the border, that is not going into the pool of revenues from where farmers get paid other than the controlled price that we have at the gates of BSI.

Osorio said that the illegal sale to the neighbouring countries is difficult to control.

“From our end, we would call on all the authorities, police, Customs, BAHA to monitor, but you know this this type of illegal activity or unofficial export happens through the blind parts of our border and it’s difficult for any authority to be able to pick up on this movement of sugar,” Osorio said.

“Yes, it can be stopped but that can be stopped only if it is caught at the moment of trying to move it across the border. It’s illegal for entry to Guatemala, but then again, it happens through the blind spots of our borders. So, it’s difficult to be able to control it. So, other mechanisms are being put in place by BSI to mitigate the excessive movement of our local sugar into Guatemala because what is happening is the sugar that should be in the shelves of our stores is the sugar that is moving into Guatemala.”

The question is who is carrying out the illegal export to Guatemala and Mexico. According to Osorio, the distributors/supermarkets are getting their monthly volumes of sugar.

“They get their volumes of sugar that they usually buy on a monthly basis and then from the warehouses, apparently, from the warehouses of some supermarkets, it’s moving into transports that go and take it across the border,” Osorio said.

“We [don’t] know if it’s the local distributors or it’s directly from the supermarkets. And it could be that both scenarios are happening. That’s the feeling we have.”

This situation has caused BSI and two of the four sugar cane farmers associations to ask Government for a hike in the controlled prices. According to Osorio, last February, Belize Sugar Industries Limited (BSI) asked the Ministry of Agriculture to increase the controlled price of brown sugar by $0.26 from $0.39 to $0.65 and the Progressive Sugar Cane Producers Association and the Corozal Sugar Cane Producers Association asked government for a $0.25 increase on plantation white sugar from $0.75 to a $1.00.

The Belize Cabinet has not approved any of those requests.

 

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