‘We are yet to see that,’ says economist as he outlines vision for sugar sector
JAMAICA is still not producing ethanol for the E10 mix of petrol which the Government introduced into the petroleum sector in 2008, senior economist at the Sugar Industry Authority, Kemmehi Lozer, disclosed yesterday.
It was said at the time that Jamaica stood to benefit significantly from the introduction of the fuel — gasolene blended with 10 per cent ethanol that is made from sugar cane.
The introduction of E10 was intended to reduce the country’s dependence on petroleum products, which are produced from fossil fuels, and reduce the nation’s oil bill.
Lozer, who was speaking at a Rotary Club of St Andrew meeting at Hotel Four Seasons, reminded that the Government had mandated the E10 blend with the intention that the sugar industry should produce the ethanol required for that market.
“We are yet to see the Jamaican ethanol being used in our gasolene at this time,” he said, pointing out that, when Pan Caribbean Sugar Company acquired the Frome and Monymusk sugar factories, the plan was to construct both a refinery and ethanol plant.
“We are yet to see that,” he remarked, noting that even though an overseas investor is set to pump funds in an ethanol plant here, the plan is to use sorghum, not sugar.
“Why sorghum and not sugar cane? Sugar cane is used to produce ethanol worldwide. In fact, it is the most widely used commodity to produce ethanol,” Lozer stated. He said Jamaica now imports 70 million litres of ethanol.
Meanwhile, Lozer argued that Jamaica needs to stop sending bulk sugar to Europe and move seriously to diversify the industry if the country hopes to not just sustain sugar production but also increase earnings.
“This is something that we have been talking about for quite some time. A well-run sugar factory should produce raw sugar, molasses, refined sugar, and electricity for its own use, and also supply energy to the national grid. That’s how an efficient sugar industry should operate. We should also have value-added pharmaceutical products,” he said, asserting that these are opportunities that the Government’s newly formed Economic Advisory Council should look into, as it could improve Jamaica’s trade balance.
Lozer further proposed that Jamaica should explore the possibility of organic sugar, or specialty sugar. “This is the kind of thing that we have to go into if we want to explore the market. Jamaica’s sugar is one of the highest quality sugars in the world,” he said, pointing out that the International Sugar Organisation specialty sugar or organic sugar can fetch a price of US$1,400 per tonne.
“The bulk sugar is at the lower end of the value chain,” he added.
Lozer said the regulatory framework that governs the industry must be changed in order to foster and facilitate this type of dynamism. “We have outlived that regulatory environment and it needs significant overhaul. Before, we used to send our sugar to the EU (European Union), but we no longer have a government-to-government agreement; we operate in a market system where the government is not responsible for the selling of the sugar any more,” he observed
The government economist proposed also that the sugar factories should be given autonomy over the sugar that they produce, noting that currently the revenues are split 62 to 38 per cent between the farmers and the factories, respectively.