REUTERS, MAY 5, 2020
HAVANA (Reuters) – Some 40 Cuban sugar mills remain open out of season despite a partial lockdown of the country, in a last-ditch effort to add foreign exchange to the government’s all-but-empty coffers.
The coronavirus pandemic has shuttered tourism, a key foreign exchange earner, and undercut remittances as well as raised shipping prices for the import-dependent country, already reeling from stepped-up sanctions under the administration of U.S. President Donald Trump.
However, economic activity continues, from farming and construction to mining, with the Communist-run government directing scarce resources to food production and export earners such as sugar and nickel.
When the harvest began in November, Cuba said it would have produced 1.5 million metric tons of raw sugar by May, of which 800,000 tons would be for export – despite shortages of fuel and other supplies
To date, just two of 13 sugar-producing provinces have met their targets and Reuters estimates total output at 1.1 million metric tons to 1.2 million metric tons, based on provincial media reports and sources with knowledge of the harvest.
“The mills will remain open as long as conditions permit,” Dionis Pérez, spokesman for state sugar monopoly Azcuba, told the local press on May 1.
Public transportation, schools, and most retail activity has been shut down, with social distancing and mask-wearing mandatory, including at work.
Workers are transported to their jobs by the state in this centrally planned economy.
Cuba has reported 1,668 cases of the viral disease and 69 deaths. There have been no reported outbreaks in production facilities.
Sugar has long been Cuba’s most important industry, with output reaching 8 million metric tons in 1991. It now ranks behind sectors such as remittances, tourism, communications and pharmaceuticals, but still earns hundreds of millions in foreign exchange.
The Caribbean island nation consumes between 600,000 and 700,000 metric tons of sugar per year and has an agreement to sell China 400,000 metric tons annually. It sells the rest on the open market.
The industry now hopes to match last year’s 1.3 million metric ton output, one of the lowest annual amounts in more than a century, before May’s hot and humid weather force the mills to close.
“They will not meet last year’s production. I would be surprised if they do much better than 1.1 million metric tons,” a local economist with knowledge of the industry said, requesting anonymity.
Reporting by Marc Frank; Editing by Bernadette Baum