Cuban TV broaches idea of foreign sugar investment

Cuban TV broaches idea of foreign sugar investment
Thu Jun 3, 2010 11:34am EDT

* Popular TV commentator bemoans dismal sugar harvest
* Says industry needs capital and foreign investors

By Marc Frank

HAVANA, June 3 (Reuters) - Cuban state-run television mentioned opening
up sugar production to foreign investment for the first time on
Thursday, even as a few mills added tonnage to the season's dismal
output of under 1.2 million tonnes of raw sugar.

This year's harvest was the worst in more than a century, the Communist
party newspaper, Granma, reported in May, while sources close to the
industry report it will be reorganized and foreign investment allowed
for the first time since mills and land were nationalized in 1959.

Cuba is quietly negotiating coadministration of a few of its mills,
according to foreign business sources, but had not mentioned the change
of policy under President Raul Castro in the government controlled media.

"It would be difficult for this sugar harvest to go much beyond the
lowest harvest in recent years which in 2006-2007 barely reached 1.2
million tonnes," popular television commentator Ariel Terrero said
during his weekly spot on the economy.

Reuters estimates output at between 1.1 million and 1.2 million tonnes,
the lowest in over a century, with only one or two mills still open well
beyond the season, based on local media reports and sources.

Terrero said with prices expected to remain relatively high and the
crop's multiple uses such as for animal feed, electricity and alcohol,
the industry was worth saving but would require investment at a time
when capital in Cuba is short.

Terrero said the industry should be allowed to reinvest part of its
profits, and that "the other factor that should not be forgotten is
foreign investment, due precisely to the attractive figures of the
industry."

Sugar Minister Luis Manuel Avila resigned in May and was replaced by his
deputy, Celso Garcia Ramirez, perhaps Cuba's last as business sources
expect the ministry to close soon and be replaced by a state-run holding
company.

The Cuban sugar harvest runs from January through April, when summer
rain and heat begin to set in, hampering cane cutting machines and
lowering cane sucrose content.

Parts of the country escaped heavy rainfall in May, allowing some mills
to remain open.

Cuba consumes a minimum 700,000 tonnes of sugar per year, and 400,000
tonnes are destined for China under a toll agreement.

In the past Cuba has imported sugar to meet export contracts.

The country stopped importing low grade whites in 2008, after increasing
its refining capacity.

http://www.reuters.com/article/idUSN0323473620100603?type=marketsNews