Rob Sequin | Havana Journal
Speculation has it that the Ministry of Sugar (MINAZ) will be closed in the near future and be replaced by a centrally controlled, state run corporation according to sources talking with Reuters.
The sugar industry was a big source of revenue for Cuba until 1992. This is the most severe reorganization since the industry was drastically downsized in 2002.
The Ministry of Sugar is the body responsible for directing, implementing and monitoring sugar cane cultivation and the processing of sugar cane and its derivatives.
Plans to create the new sugar corporation and revitalize the industry by allowing foreign investment and the closing inefficient sugar mills are nearing final approval by President Raul Castro.
Cuba used to produce 8 million tons of raw sugar a year before the collapse of the Soviet Union but now accounts for less than 5% of foreign exchange earnings. In 1992 Cuba shut down and dismantled 71 of 156 mills, all 71 built well before the revolution, and relegated 60 percent of sugar plantation land to other uses. More mills have closed since then, with just 44 mills open this season. Another 20 have been maintained in working condition for future use.
Near term output is expected to be only 1.2 million tons.
A source close to the industry said “in the medium-term they hope to increase production to 2.8 million tonnes using fewer mills”.
“Yields per hectare are currently around 3 tonnes per hectare and the goal is to bring them up to at least 6 tonnes,” he added.
The international standard is 8 tons per hectare.
Similar corporations to the one planned for sugar operate with foreign partners in nickel (Cubaniquel) and oil and gas (Cubapetroleo) under the Ministry of Basic Industry.
“The new structure will give decision makers in the industry more autonomy and allow them to keep a percentage of revenues for re-investment,” a Cuban economist said, asking like the others that his name not be used.