Cuba reports sugar production rose 8 percent, lower than expected

Cuba reports sugar production rose 8 percent, lower than expected
Mon Jun 17, 2013 10:15am EDT
* Output was 1.51 million tonnes raw sugar
* Production falls well short of forecast
* Possible impetus for investment
By Marc Frank

HAVANA, June 17 (Reuters) - Cuban raw sugar production
weighed in at 1.51 million tonnes this season, official media
said at the weekend, 8 percent above the previous harvest but
short of the 1.68 million tonnes forecast.
Cuban television, reporting Sunday on a weekend meeting to
review the harvest, blamed "obsolete mills and machinery" among
other factors such as Hurricane Sandy and poor management, for
the less than expected performance.
"Mills opened and closed, opened and closed, opened and
closed  even though managers said they were ready for the
harvest," Cuban Vice President Jose Ramon Machado Ventura told
the meeting.
Sandy also put a dent in the harvest before it began. The
storm damaged mills and flattened cane in eastern Santiago de
Cuba and Holguin provinces in late October.
The two provinces produced 70,000 tonnes less than forecast
before Sandy hit.
The harvest runs from December through April, but often
stretches into May and June.
Only 8 of 56 mills in the country were built after the 1959
revolution, the last in the 1980s.
Brazilian builder Odebrecht SA became the first
foreign company since the revolution to produce sugar when it
began administering one of the eight mills this year.
Administration agreements with the other seven mills are now
open for negotiations, according to the Cuban Chamber of
Commerce.
At least three other companies are negotiating management
agreements, according to two different company representatives.
"We hope this will push the Cubans to allow more foreign
participation in the industry," said a representative of one of
the companies, asking his name not be used.
Theoretically, the state-run sugar industry has been open to
direct investment since 1995, but in practice there has been
little interest on the government's part except in a few joint
ventures making sugar derivatives such as alcohol and parts used
in sugar processing.
A big obstacle is the U.S. Helms-Burton law, which penalizes
investment in properties seized from U.S. owners decades ago.
The law also contains a yet-to-be implemented section that would
allow Cuban-Americans to sue investors who "traffic" in their
expropriated properties.
The Sugar Ministry was closed two years ago and replaced by
state-run holding company AZCUBA, with subsidiaries in each
province.
AZCUBA hopes to reverse a long decline in output from 8
million tonnes in 1990, with plans to produce 2.4 million tonnes
by 2015.
Cuba consumes 600,000 to 700,000 tonnes of sugar annually
and has a 400,000-tonne export agreement with China. Cuban sugar
is also sold for export on the spot market.
Cuba has not imported sugar for a number of years.

Source: "Cuba reports sugar production rose 8 percent, lower than
expected | Reuters" -
http://www.reuters.com/article/2013/06/17/food-cuba-sugar-idUSL2N0ET0FV20130617