Sugarcane market sours, cash crop on the decline for Brazil and Cuba

For the first time in modern history, Cuba has to import sugar due to several poor sugarcane harvests in a row. According to a report from Agence France Presse (AFP), the former world leader in sugarcane production has slowly seen a decline of its cash crop ever since the collapse of the Soviet Union.

During its heyday, sugar comprised around 75 percent of Cuba’s total exports, but by 2015 that number had shrunk down to just 13 percent. According to AFP, Cuba’s largest exports are now tobacco and nickel. The crop was further damaged in 2017 by Hurricane Irma, and an unusually wet rainy season compounded the problem.

Now, Cubans will be using sugar imported from France, which has a similar taste but looks different from what the citizens are accustomed to using. According to AFP, the French sugar is made from beets and appears smaller and whiter than the large, brown granules of traditional sugarcane sugar.

“The sugar we get now is very good. It is very sweet, not very different. The only difference is the color,” said 40-year-old Felicia Navarro, a Cuban citizen while speaking to AFP.

While Cuba only bought around 3 tons of French sugar between 2001 and 2017, the country has imported more than 40,000 tons in 2018 alone.

Cuba isn’t the only country that is having difficulty cultivating sugarcane. According to Reuters, Brazil’s top sugar processing plant is has seen a steep decline in production thanks to a run of dry weather.

Although Brazil now possesses the most sugarcane fields in the world, these fields have seen a decline in output for four years running, and some analysts are unsure if and when the trend will reverse.

It’s not just the weather that is crushing sugar profits. According to Reuters, some analysts blame the reduction of investments being made in the industry on falling profits and financial hardships.

Further compounding Brazilian sugar’s troubles is a 45 percent tariff that has been placed on the sweetener by the Chinese government. According to Reuters, Brazil filed an official complaint with the World Trade Organization (WTO) earlier this week. By taking their grievance to the WTO, Brazil has triggered a 60-day negotiation period between the two countries.

As for the Cubans, government officials in Havana continue to blame the United States for the country’s hardships. According to AFP, Cuban President Miguel Diaz-Canel stated that the US’ embargo has “condemned” Cuba’s population “to die of hunger.”

“The main obstacle to the development of the island is the embargo imposed by the United States, Diaz-Canel said.

Some economists disagree with the president’s assessment of the situation. Omar Everleny Perez, a Cuban economist, argued that the island’s lack of natural resources and cash coupled with a failing infrastructure makes economic growth difficult. As the country began to modernize its economy and move away from sugarcane cultivation, fewer investments were spent on the farms, which made them more vulnerable to factors like the weather.