Cuban sugar harvest set to disappoint, adding to economic woes

HAVANA, May 15 (Reuters) – The Cuban sugar harvest will weigh in at no more than 1.3 million metric tons this year, according to Reuters estimates, in the latest bad news for the struggling economy and well below the government’s forecast.

The industry had planned to produce 1.5 million metric tons of raw sugar during the harvest and export 920,000 metric tons, according to a presentation by Economy Minister Alejandro Gil Fernandez at a government meeting in December.

Harvesting begins in November, is in full swing by January and ends in May, when summer humidity and rainfall will make work difficult and costly. Mills operating into June are rare.

The Communist-run government had forecast in December that the economy would grow 1.5 percent this year, based in part on sugar output, higher tourism revenue and retail activity and exports such as sugar and nickel.

However, retail sales have fallen due to shortages of basic goods, tourism revenue has been less than expected, and nickel and cobalt exports have dropped amid lower than expected prices.

The Reuters sugar harvest estimate is based on provincial and national news reports and two sources with some access to industry data.

“They only reached a million metric tons in late April and will be lucky to top 1.2 million tons before conditions force the mills to close,” said one of the sources, who asked not to be identified.

The second source was only a bit more optimistic.

Cuba consumes between 600,000 and 700,000 metric tons of sugar a year and has an agreement to sell China 400,000 metric tons annually. It sells the rest on the open market.

“The main problems of this harvest have been mills breaking down due to their decrepit state and labor turnover, problems transporting cane and no spare parts for equipment,” the source said.

AZCUBA, the state-run sugar monopoly, said earlier this week that just 15 of 54 mills had met their targets.

Of 13 sugar processing provinces, none have met their targets to date.