Sugar shortage crisis continues despite more sugar produced for the local market

By Jose Luis Cruz: Belize continues to face a local sugar shortage despite a reported increase in the production of sugar for the local market. The Belize Sugar Industries Limited (BSI) says that it has increased its domestic sugar supply by 18% for brown sugar and 8% for white sugar from January to April 2024 compared to the same period last year. Despite this BSI says it “has been receiving increased reports of shortage of sugar in the domestic market”.

A major factor contributing to the domestic shortage is the increase in illicit cross-border trade. Because the price of both brown and white sugar is controlled in Belize, there is a huge price difference for sugar in Belize as compared to sugar in Guatemala and Mexico. Because the sugar price is significantly higher in Guatemala and Mexico, there is a great incentive for smugglers to buy sugar in Belize and sell to these neighboring countries via the numerous border crossings.

BSI notes that while the recent 2024 census by the Statistical Institute of Belize (SIB) shows slower population growth than anticipated, increased consumption patterns suggest other factors are driving demand. One of those critical factors is the outdated pricing of sugar in Belize. The prices for brown and white sugar have not been adjusted for 23 and 9 years respectively, says BSI, while inflation has risen by 16.6% from 2014 to 2023. This stagnant and out-dated pricing structure makes smuggling even more attractive argues the company.

In its social media release, BSI reminds wholesalers that buy sugar directly from BSI, that the sugar sales are intended solely for the Belize market and warned against involvement in exporting or smuggling. In recent appearances on the Love FM Morning Show and other local media, Ministry of Agriculture personnel explained that efforts will be ramped up to find out who are the main distributors involved in the illicit trade of sugar to Guatemala and Mexico and that pressure will be brought on them to reduce the quota of sugar that they receive from BSI.

BSI is urging the Government of Belize (GoB) to review and increase the price of domestic sugar to reduce the price disparity and curb the illegal trade. Without such measures, BSI believes the pressure on domestic sugar supplies will persist and the sugar shortage on the local market will worsen.

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