Ethanol Improves Venezuelan Sugarcane Outlook

Venezuela is not producing enough sugar to meet its current demand, yet incentives are not strong enough to prompt increased production. That may change with the new “Ethanol Project” proposed last November by Venezuela’s government, which would call for 300,000 hectares (Ha) to be planted in the country in three years, according to the US Department of Agriculture’s Foreign Agriculture Service (USDA-FAS). Like Brazil, Venezuela plans to build its ethanol production on the sugarcane crop.

Skeptical of the lofty 100,000 Ha increase per year of sugarcane, the country’s sugar industry is proposing to plant 5,000 Ha of the crop per year over a five-year period, and revising retail prices annually.

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Sugarcane production for 2004/05 is estimated at 650,000 tons, a better than expected year thanks to favorable weather and improved varieties and farming practices. The production forecast for 2006/07 is forecast by USDA-FAS to increase by approximately 3% to 4% over 2005/06 in response to efforts from the industry to promote more plantings and obtain better yields. Despite extensive lots of land for sugarcane plantings and appropriate weather, domestic production is not sufficient to meet demand. Historically, between 70% to 75% of the country’s sugar demand is met by domestic production.

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The sugarcane harvest takes place from November through April and from June through November. The first harvest is responsible for about 70% of the cane cut in Venezuela, and the second harvest for the remaining 30%. Two Venezuelan mills, Central La Pastora and Central Carora, located in Lara State in the northwest, have plantations on which cane can be harvested all year long.

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Currently, the following institutions represent the Venezuelan sugar industry:

  • FESOCA: Venezuelan Federation of Sugar Cane Growers’ Associations (in Spanish: Federación Nacional de Asociaciones de Cañcultores de Venezuela)
  • UPAVE: Venezuelan Sugar Producers Association (in Spanish: Unión de Productores de Azúcar de Venezuela)
  • VENAZUCAR: Venezuelan Sugar Producers and Refiners Association (in Spanish: Asociación Venezolana de Productores y Refinadores de Azúcar)

The Ethanol Project is not the first attempt by the Venezuelan government to boost production of the crop. During the past seven years, the government made several promises to boost sugar production by increasing area planted, building more sugar mills, expanding access to agricultural loans, and providing technical assistance to sugarcane growers. The government’s intention is to reduce or eliminate imports of sugar in the near future. To date, few of these plans have materialized.

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