The Guyana Sugar Corporation (Guysuco) now has Czarnikow Sugar of London as its marketing agent and has retained the services of Dr James Matheson to do its market lobbying.

Bookers Sugar Company of London had managed Guysuco's marketing strategy for the last 47 years, but the company ceased trading at the end of last year when its current contract with Guysuco expired and its chairman, Alan Forster retired.

Forster was here last week to bid farewell to the friends he made over the nearly half-a-century of his association with Guyana.

Speaking with Stabroek News, Forster explained that the marketing aspect was three jobs rolled into one and all handled by his firm. The contract entailed the physical shipping, selling, shoring and collecting of the proceeds; the politics of sugar, which included speaking to the European Union (EU) on quotas; and the reconfirmation of orders.

Forster, 68, said the physical handling would now be done by Czarnikow Sugar and Dr Matheson, a former Guyana ambassador to Brussels and more recently attached to the CARICOM Regional Negotiating Machinery in London, will handle the politics of the sugar arrangement. Guysuco will manage the reconfirmation of orders.

Forster was reluctant to speak on the future of sugar in Guyana, given the changes in marketing dynamics that are taking place in the EU.

By 2008, Guyana's access to the EU market under the Special Preferential Sugar Quota of around 65,000 tonnes comes to an end. However, the Sugar Protocol with the EU will remain, which will guarantee Guyana 167,000 metric tones of raw sugar value per year.

Forster said he felt that the downward pressure on sugar prices would continue though prices were expected to remain at their current levels in the short-term.

The effect of EU-produced beet sugar on the price of cane sugar in the EU market is expected to heighten when six beet sugar producing countries join the EU before 2008 including Poland, Lithuania and the Czech Republic. The surplus in the market, Forster said, was likely to have a negative impact on the price for sugar.

"It is not going to be easy for sugar and the way to get around to meeting the challenges is to be more efficient," Forster said. But he would not comment on Guysuco's US$110M planned expansion at the Skeldon estate.

He said he had seen wonderful signs at Uitvlugt where the yield per acre was increasing. He also noted the production of organic sugar by Guysuco to be tested on the market this year.

Forster said Guysuco was very brave and was by far the most efficient sugar industry in the region. The question for him was whether Guysuco would be able to withstand the pressure of decreasing income, without making the compensating savings in costs. He said he felt the corporation was on the right track, attempting to get more sugar out of the same acreage.

However, he also felt that Guysuco needed to find new markets for sugar because apart from the SPS quota now, the protocol quota and a preferential market for 12,000 tonnes in the US, it would have a lot of sugar on its hands. He noted that moves were underway to aggressively market sugar in the region and this year sales could be substantially more.

He opined that increasing sugar production would only make sense if there was a market for it and cited the packaging of sugar.

Guysuco has on the local market a small packet of sugar branded genuine Demerara sugar, which is being used by the service industry and Forster said that the corporation would have to target the Caribbean with this product. He said the packaging was not sophisticated enough to enter the US or European markets and pointed out that the bond requirement of around US$100,000 per shipment would be a disincentive to target that market. But he felt that the branding was a very profitable venture and Guysuco could sell up to ten tons per year using this method. But its target would have to be air carriers and the service industry generally.

On the other hand, he said, he saw potential in organic sugar cultivation and noted that Tate and Lyle was interested in getting hold of organic sugar to experiment with and would pay a premium for this. Guysuco is expected to produce about 500 tonnes of organic sugar in another month or two.