And, in other news about the sugar industry, representatives of ASR/BSI made public comments today on the Cabinet approval for cane farmers in the north to deliver cane to the Santander Sugar Group in the west. 3 weeks ago, the Briceno Cabinet authorized the delivery of 50,000 tons of sugarcane from Orange Walk and Corozal sugarcane farmers to be milled by the Santander Sugar Group. This decision was done to ensure that cane farmers don't lose money due to large portions of stand-over cane in the fields.
But, in an open letter written last week, ASR/BSI wrote to farmers saying that there is no need to take this option.
That letter says, quote, "The government decision was based on BSI ending the milling season at the end of June. This is entirely false. While no sugar mill, BSI nor Santander, can predict the impact of the weather, BSI has the intention of milling all the cane anticipated under the commercial agreements for this season, as we have in previous years. We have a strong track record of achieving this. BSI fully anticipates the milling season going into July as it has in recent years. This is mainly the result of a two-week delay in the start of crop followed by the suspension of milling in January, due to the state of the sugar roads and the weather." End quote.
Senior representatives of the company appeared this morning on the Despierta Belice morning show, and here's what they had to say on the topic:
Mac McLachlan, VP, International Relations
"We were very surprised by the government decision and as elaborated to us we were surprise about the rationale behind the decision, because it was based on an assumption that BSI would not be able to mill out all the cane this year which in itself is based on a number of facts that we don't recognize. One of them was cane estimate that we believe is higher than is actually out there and another was an assumption that we wouldn't be milling beyond the end of June, neither of which we believe are correct. I think the biggest surprise we had there had been no consultation with us as the private sector mill before a decision that could materially impact us was made. Now I know that was not the intention, that the intention was to give farmers an alternative which we fully understand if the circumstances were such that we would be unable to receive the cane. To be honest with you we have a good track record at milling all the cane in the north of the country and the last thing we would want to do is to disadvantage our farmers. Our farmers deliver 90% of the cane that comes into BSI and I just fear that a premature decision like this might end up disadvantaging them, because of the added cost of delivery cane 160 kilometers away to another mill and also the fact that I think all of this was based, in our view, inaccurate data and predictions."
The company's senior reps also discussed the confusion about an estimate that they would only be able to mill 1.06 million tonnes of sugar cane. They said this was referring to an initial estimate of the total amount of cane in the fields, and not the mill's full capacity:
BSI/ASR Representative
"Every year, every crop, before the crop commences BSI issues right after the final payment for the preceding crop, so an example the final payment for the 2020 crop is done on the first Monday of November and in that same week BSI for the commercial agreement puts out an estimate of the first cane price for the crop is and that cane price has to make an assumption by BSI of what the cane supply will be, what sugar production and molasses production be expect from that cane, what are the initial estimates for sugar prices and those are brought into the estimate and as the crop progresses, every month we provide an update to the farmer association of what the revised estimate is looking like. As an example last week we provide a through cane price to the association and in that estimate the cane supply based on what the outlook is looking, how much cane has been mill up to date, how much time we are predicting we have left, it has been increase to 1.1. And again that is an assumption at this time. As we go next month another assumption will be made and we will update all the variables including cane supply, cane production, cane prices."
Mac McLachlan, VP, International Relations
"I think that 1.06 was really taken completely out of context. We, as I said have every intention all thing being equal, we don't get unforeseen events impacting us - that we will be able to mill all the cane that is schedule to come to BSI."
