Magazine article African Business

Sugar Loses Its Sweetness: The Sugar Industry in Mauritius Is Facing a Huge Threat. the European Commission Is Planning to Cut the Price It Pays for This Commodity by More Than a Third over the Next Two Years. Nasseem Ackbarally Reports from Port-Louis

Magazine article African Business

Sugar Loses Its Sweetness: The Sugar Industry in Mauritius Is Facing a Huge Threat. the European Commission Is Planning to Cut the Price It Pays for This Commodity by More Than a Third over the Next Two Years. Nasseem Ackbarally Reports from Port-Louis

Article excerpt

Mauritius is banking on a concerted effort to lobby friendly European countries in order to reverse the European Commission's plans to drastically cut the price it pays for sugar.

For the last 30 years, the sugar industry on the island has benefitted from the 1974 Sugar Protocol which has guaranteed a price at least three times higher than that commanded on world markets, and the country has used this income stream to develop its economy and encourage new sectors like textiles and tourism.

An intensive period of industrial reforms was initiated in 2001 to make the sugar sector viable. Today, Mauritius exports 491,030t of sugar under the EC's Sugar Protocol. It also benefits from the European Community's guaranteed quota of 'special' sugar with 41,980t of imports guaranteed every year.

Sugar represents 17% of Mauritius' export revenues and was the foundation of the economic miracle that the country experienced from 1983 to 1996. That miracle helped to transform this small island, located in the south-west Indian Ocean, from a small mono-crop economy into a newly-industrialised nation. Sugar cane adapts itself well to the local climate, and Mauritius has developed all the necessary experience to compete on world markets.

Numerous attempts to diversify the agricultural sector away from a heavy reliance on sugar have failed. Sugar cane remains the pillar of the local economy--and is likely to remain so for the immediate future, according to sugar experts on the island.

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"This is a question of life and death for Mauritius and the African Caribbean Pacific (ACP) sugar producing countries," said Mauritian Prime Minister Paul Berenger commenting upon the EC's decision to cut prices--announced four months ago. He said everything should be done to minimise the price cuts and delay the application of the measures. In the meantime, sugar producing countries should lobby for adequate compensation.

Mauritius' agriculture, food technology and natural resources minister, Nando Bodha, acting as a spokesman for ACP countries, added that any cut in sugar prices will not only impact on the industry but also create many negative socio-economic issues on the island. "Price cuts of such a magnitude over such a short time-frame would be disastrous for Mauritius and traditional ACP suppliers of sugar. It will seriously undermine a vital pillar of the economies of sugar dependent ACP countries", he commented.

Others observers also fear that the proposed price cuts will have dire consequences, sap economic growth while creating poverty among sugar farmers.

INTENSE LOBBYING

Mauritian political leaders reacted immediately. They were in Europe for two months last summer, June and July, lobbying British, French, Belgian and the Netherlands government officials arguing that apart from its commercial aspect, sugar cane promotes rural development, protects the environment and consolidates food security.

"In Mauritius, revenues from sugar cultivation have helped our people access higher education and training, creating barristers, lawyers, doctors, engineers and other professionals. We are a sugar civilisation not simply an exporter of the product," Bodha affirmed.

The lobbying campaign will continue this month (November) when the Mauritian government is expected to present a series of demands to the European Union detailing plans over the next decade to enable the sugar industry to survive and prosper. Local experts are currently preparing an action plan for 2005-15 to address all issues related to the sugar industry.

According to Bodha, this plan is designed to speed up the reform process for the sugar industry with an intensive programme of mechanisation and new irrigation projects. There are plans to build a bagasse refinery producing ethanol-gasoline blends for motor vehicles fuels; the industry has also identified producing value-added 'special sugars' for export markets. …

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