October 18, 2010 / 2:27 PM / 9 years ago

Cuba prepares for another bitter sugar harvest

*Government hopes to match this year’s 1.1 million tonnes

*Fewer mills to open

*Joint venture talks stalled

By Marc Frank

HAVANA, Oct 18 (Reuters) - Cuba’s once proud sugar industry is gearing up for the 2011 cane harvest with fewer mills scheduled to open and hopes to merely equal this year’s dismal output of 1.1 million tonnes of raw sugar, the official media reported on Monday.

The Communist party newspaper Granma, quoting deputy sugar minister Adrian Jimenez Fernandez, said 39 mills would grind the cane into raw sugar, compared with 44 the previous season and 54 in 2009, with the “mission of producing a similar amount of sugar as this year’s Harvest”.

The harvest runs from January into May, though a few mills open in December for what is called the “little harvest.”

Cubans, who saw their monthly sugar ration cut by a pound this year, are expecting further rationing in 2011 as the cash-strapped island nation tries to avoid importing sugar to meet its domestic and international obligations.

The country consumes 700,000 tonnes of sugar per year and has a 400,000 tonne toll agreement with China.

Traders said they were told the country had no sugar to sell after the September estimate came in at less than 1.1 million tonnes.

“The plan is to try to reach 1.1 million tonnes, but even that will be difficult,” an industry source in the provinces said.

INVESTMENT TALKS STALLED

A local expert, who like others asked his name not be used due to a prohibition on talking with foreign journalists, said the country would be lucky to top a million tonnes.

Cuba, where sugar once was king, accounting for 90 percent of export earnings compared with under 5 percent last year, has drawn up plans to reorganize the industry and allow foreign investment for the first time since mills were nationalized in the 1960s.

But the reorganization has yet to begin and negotiations with at least two foreign companies to jointly share administration of mills and share production for a limited number of years stalled in June, foreign business sources said.

Cuba’s fall from once being the world’s biggest sugar exporter, producing 8 million tonnes of raw sugar annually, began with the 1991 collapse of former benefactor the Soviet Union, which had paid padded prices for Cuban sugar to boost the island’s economy.

Cuba shut down and dismantled 71 of 156 mills in 2003 and relegated 60 percent of sugar plantation land to other uses. More mills have closed since then.

Only 1.7 million acres (700,000 hectares) of the over 5 million acres (2 million hectares) once controlled by Cuba’s Sugar Ministry are currently dedicated to sugar cane. (Editing by; Editing by Alden Bentley)

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