ECONOMY-CUBA: Derivatives to Boost Sugar Revenues

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Aug 3 1999 (IPS) - Cuba is banking on increasing the production of by-products from its annual sugar crop to boost revenues for the sugar industry – the island’s main export.

Some 50 sugar-cane derivatives, ranging from animal food to pesticides, are currently in the “process of development,” according to newspaper reports.

Trade sources estimate that sugar will generate revenues of more than 12 million dollars – a dramatic drop on the 100 million dollars the industry earned annually during the 1980’s – little of which stemmed from the production of sugar-cane by-products.

All the same, officials are hoping the industry can be revitalised through expanding the output of side products.

These will include wood preservatives, anticorrosive paints, veterinary medication, dehydrated honey and a biological preserving solution made from fibrous residues, known as Biocil. Likewise, there has been mention of Flexotec, an enzymatic product used in making leather, bird and pig food, materials made from cane residue, anti-foaming agents and canned mushrooms.

The new products will complement the more than 25 derivatives presently produced by the Ministry of Sugar, which include alcohol and beverages, artificial wood (bagasse boards), furfural, furfural-based alcohol, sorbitol, glucose, six different animal foods, biological pesticides, and organic fertilizer.

Scientific studies indicate sugar cane serves as a productive base for nearly one hundred commercially accepted derivatives.

“Sugar cane is really a blessing due to the possibilities it affords. All of it can be used – the stalks and fibres – and this is what must be developed,” Ricardo Alarcon, president of the Cuban Parliament, observes.

In his opinion, the future of the sugar industry lies in the “more consistent” development of sugar cane’s potential, the principal product of which is subject to the fluctuations of supply and demand on the international market.

Specialists agree that the wider the range of by-products, the greater the variety of markets for placing these exports, and the less dependent Cuba will be on sugar, the price of which has been falling steadily.

This year’s sugar harvest totalled some 3.6 million tons – regarded as a “victory” because last year’s harvest barely reached 3.2 million, the worst in 50 years.

This decline in yield during the 1990’s reflects a reduction in the production of derivatives, aggravated by the lack of investment and material resources, scarce financing and the loss of Cuba’s most important market – the former Soviet bloc.

The generation of electric energy seems to be of the highest priority to this sectors development program, as much for the generation of by-products as for the burning of sugar-cane bagasse – or residue.

Thanks to a program initiated more than two decades ago, there are 252 turbo generators installed in Cuba’s sugar mills, making use of steam in the industrial process of sugar production and, at the same time, utilizing the residue produced by the mills.

“Sugar cane is the principal source of energy,” emphasizes Alarcon, who believes that if Cuba is to really achieve “an efficient industrial capacity in terms of energy, and take advantage of the so-called derivatives, a break should be made with a market that pays little for sugar cane.”

The Achilles’ heel of Cuba’s economy continues to be petroleum. Cuba obtains part of the petroleum it needs from Russia in exchange for sugar.

Under an agreement signed at the beginning of 1999, Russia must supply the island with 1.5 million tons of crude oil this year in return for 800,000 tons of unrefined sugar.

Nevertheless, it is expected that once this contract expires, Government-controlled shipments of petroleum from Russia will cease, and the exchange of oil for sugar will be left in the hands of private business interests.

Cuba’s production of sugar-cane derivatives boasts nearly 300 industrial plants.

Furthermore, it is the only sector of this agricultural industry open to the formation of joint economic ventures. At present, a distillery backed by Spanish and Cuban capital is up and running in Cienfuegos, some 250 kilometers to the east of Havana.