Losses to sugar theft on the rise

The sugar industry last year lost 750 tonnes of the raw product valued around J$34.5 million, believed to have gone missing while in transit from the sugar factories to the vessels that ship the sweetener to the export markets.

The sugar was allegedly lost to a scam that dates back to the late 1990s, in which more than 12,000 tonnes of the product valued at J$370 million has been unaccounted for more than a decade, a Wednesday Business probe has found.

The loss over those 12 years represents an average of 0.6 per cent each year, three times the international standard of 0.2 per cent allowed for unavoidable losses; but no alarms were raised until now when the local producers discovered that during the 2009/10 crop year, the industry's
losses reached an all-time high of 0.8 per cent.

"This is not news to those who operate in the sector; it has been a multimillion-dollar business over the years," said a leading player in the sector, who spoke on condition of anonymity.

"It is no secret that there is a natural black market in Jamaica for 1,000 to 1,500 tonnes of sugar annually."

Calls for comment to Sugar Industry Authority,Jamaica Cane Product Sales (JCPS), All-Island Jamaica Cane Farmers' Association (AIJCFA) or the Sugar Manufacturers Corporation of Jamaica (SMCJ) were not returned.

"The industry players, in my view, must hold some one accountable or this will only get worse," said Minister of Agriculture and Fisheries Dr Christopher Tufton.

Tufton said, however, that his knowledge of the matter was limited.

Wednesday Business has learned from industry sources that SMCJ has hired a consultancy firm to investigate the losses and recommend preventative measures.

Indications are that output from government factories is the main target of the racket.

In most cases the discrepancy is discovered during offloading at overseas ports. Detections on the Jamaican side happen only when the last batch of a silo's stored content is being loaded for shipment.

Shared losses

The losses are shared by cane farmers and manufacturers, who split the proceeds of the sale of sugar 62 per cent and 38 per cent, respectively. They are yet to receive their final payment for the 2009/2010 crop.

"Final payment is expected to end up around J$44,000 to J$45,000 per tonne," said a farmer who requested anonymity.

"Losing this amount to the pool of funds is devastating for the industry - both farmers and manufacturers - and it is now time something is done about it."

According to the source the discrepancies have involved specific haulage contractors over the years, who remain in the employ of the industry.

Trucks are loaded directly from silos at the factories, which transport the raw sugar to the Reynolds Pier, in St Ann, from where it is shipped. Drivers are not allowed possession of keys to the container.

A new tracking system was put in place last February, but has had little effect.

"When they get to certain areas they will stop as if taking a rest," said our source.

"Another trailer head will come and, based on where the tracker is located, detach the trailer from the head of the parked truck and leave with the sugar, while those monitoring the truck continue to do so."

More stringent security

Even as the industry players await the outcome of the probe, which should be completed before month end, talks of a more stringent, but less costly security system is expected to replace the GPS technology

"The system being looked at has worked for most of our major and most successful local firms. This will eliminate the need for too many persons on a truck at any one time," the source said.

Jamaica projected about 148,000 tonnes for the last crop ending June 30, but only produced 119,518 tonnes of sugar: 17,000 tonnes from Monymusk in Clarendon and 41,000 from Frome in Westmoreland. The remainder came from privately operated firms Appleton Estate, Worthy Park and Golden Grove.

According to cargo statistics published by the Port Authority of Jamaica, 92,605 tonnes of sugar were shipped from the Ocho Rios facility last year, 11,000 tonnes of which flowed to the United States market.

Concerns have also been raised about the condition of the trucks being used to transport the raw sugar.

source: jamaica-gleaner