This means lowering the cost of production from 17 cents to about 11 cents and initiating the co-generation and distillery components of the modernization plan. Government also needs to examine the possibility of the other sugar factories generating electricity and hosting distilleries and refineries.

“For us to get down to actually 10/11 cents per lb, we need all the sugar that we are producing now,” GINA quoted Jagdeo as saying. “We need 400,000 tons of sugar because it means your unit cost will go down, since fixed cost doesn’t move. That is why we need to keep these factories into operation… You may think we’re crazy, but I see a future with us growing more sugar. In fact, there is a possibility if the discussions we are having now are successful, we could double our production of sugar.”

The President explained that the additional sugar-cane will be used to produce ethanol rather than raw sugar, adding that government will make use of the Brazilian President Lula Da Silva’s offer to CARICOM states to provide guidance in this area.

The production of ethanol, especially with the high fuel prices, has become feasible and discussions are ongoing with interested groups, he said, but did not comment on the technology needed, saying investors would bring these in.

Still President Jagdeo acknowledged that reform was expected, but, there was hope that it would have been less drastic, with a longer transitional period and greater transitional assistance.

Sugar contributes to 17 per cent of the Gross Domestic Product of Guyana, 30 per cent of the foreign currency earnings and is responsible for keeping about 30,000 employed, directly and indirectly. Guyana has been growing sugar for the last 400 years.

Both Jamaica and St. Kitts, Caricom producing sugar countries, recently were forced to close factories there amidst the EU price cut plan. – Hardbeatnews.com