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Understand the biggest crisis in the Cuban industry: the sugar collapse. See how this crisis is impacting the economy and rum production. Learn more about the challenges facing the sugar industry in Cuba
There are countries that depend on their exports, and Cuba is one of them. What was once the pride of the country and the engine of the economy, is now at historic lows and with little hope of recovery for the sugar sectors. Sugar is vital for Cuba not only to satisfy domestic demand and export, but also to be able to feed another very important industry: that of rum.
There was a popular phrase that said “without sugar, there is no country”, and this is something that has sadly been fulfilled in recent years.
The impact of the Soviet Union
Südzuicker is the leading sugar production company. This is a German giant that has almost 6.500 employees and had revenues of 4.200 million euros in 2023. The figure that interests us is the production of 4,1 million tons produced last year. Well, Cuba produced eight million tons of sugar in 1990. However, the good days ended with the collapse of the Soviet Union in 1991.
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Production was good, but exports were not as high due, among other things, to the blockade in the United States, and little by little the industry dwindled. Between 2002 and 2004, Cuba reduced the number of refineries from 156 to 61, which led to the elimination of more than 100.000 jobs and, in addition, reduced the cultivation area from a spectacular two million hectares to just 750.000 hectares. In 2010, total production was 1,1 million tons.
Pandemic and lockdowns affect the sugar industry
After disastrous years, President Raúl Castro decided to do away with the Ministry of Sugar – MINAZ – so that a new business group, AZCUBA, could control the production of both sugarcane and derivative products. The intention was to modernize the production process and reorganize a sector in crisis, but it seems that the cure was worse than the disease. The pandemic hit the sugar industry hard, but the blockade that the United States continues to impose on the country is what is causing a dire economic outlook.
Miguel Guzmán, from the Yumurí sugar cooperative, not only complains about his salary to the BBC, stating that he can buy almost nothing due to skyrocketing inflation, but also about the lack of material. “There are not enough trucks and fuel shortages (due to prices five times higher since March 1) mean that it is sometimes several days before we can work.” This absolutely delays the entire process and is something that (along with other factors) is harming production.
Last disastrous harvest
In 2019 there was something of a recovery, with production of 1,3 million tons, but since then it has gone downhill. 2020 was a lost year due to the pandemic, but 2021 wasn't much better: 800.000 tons, the lowest figure since 1908 and 10% of the eight million tons in the 90s.
Things were no better last year, with production at just 350.000 tonnes. Dionis Pérez is the Director of Communications at the state-owned company AZCUBA and recognizes that there are almost no refineries operating at the moment. Workers complain about obsolete materials and rusty tools that cannot guarantee good production. In turn, Juan Triana, from the Center for Cuban Economic Studies, states that “it is a disaster. Today, Cuba’s sugar industry barely exists.”
Importing sugar to support other industries
Traditionally, Cuba consumed 700.000 tons and exported the rest, but with current production, the situation has changed radically. Juan points out that they are producing the same amount of sugar as they did in the mid-XNUMXth century, when it was not an industry as such, and places part of the blame on Trump's aggressive trade policies that Biden has not reversed. However, these are not just problems caused by the US government.
In April of this year, and with one harvest yet to be completed, they had only produced 71% of the predicted 412.000 tons, which means something less than 300.000 tons. We will see where the figure is in the current harvest, but voices like Omar Everleny, a Cuban economist, state that “we will have to import and, of course, less sugar means there will be less alcohol for various industries and, of course, less rum”.
And this fatigue in Cuban sugar production is a huge snowball. If there is no sugar, you cannot satisfy domestic demand, but also not export to make money. If there is no sugar, the other national pride, rum, cannot be manufactured. Therefore, as the popular phrase goes, if there is no sugar, there is no country.
Images | Forest & Kim Starr, Rufino Uribe
