According to the Dominican Sugar Institute (INAZUCAR), 3,980,684 metric tons were produced during the 2015-16 harvest season, which lasted 194 days from December 2015 to June 2016. The three main companies contributed more than 95 percent of all the sugar produced; Central Romana (“CR”) with 2,362,147 metric tons, Cristobal Colon with 1,046,268 metric tons, and Barahona with 389,855 metric tons.
The U.S. market remains the most important one for the Dominican Republic (“DR”). In 2016, sugar and sugar confectionary exports from the DR to the United States amounted to U.S. $111,726,338, a slight increase of 0.6 percent from the 2015 total of U.S. $111,070,969. The DR also receives the largest single-country allocation under the U.S. Tariff Rate Quota (“TRQ”), which is the import quota allocation. In 2016, the DR’s share of the TRQ was 17 percent, more than any other country.
The Dominican Sugar Industry (“DSI”) has always been a pioneer in the agricultural space, and continues to lead the way in terms of state-of-the-art technology and best practices. The DSI is moving from strength to strength as it navigates an increasingly complex global trade, regulatory, and sustainability framework. As the industry continues to adapt to new opportunities and challenges, it has always endeavored to be a model for its employees, communities and the wider world in which it operates.
HISTORY OF SUGAR PRODUCTION
Period of 1980s and 1990s
Historically, sugar has been a mainstay of the Dominican economy; it was the nation’s largest employer and the main source of export earnings. In the late 1980s, the Dominican Republic (DR) was the world’s fourth largest producer of sugarcane. In 1982, the Dominican Republic had the largest share of the U.S. allocated Tariff Rate Quota (TRQ) at 17.6 percent. A TRQ permits a certain quantity of sugar to enter the United States at a reduced customs duty during a quota period; quantities in excess of the quota are subject to a higher duty rate.
Sugar production began to decline in the 1980s and further into the 1990s due to both international and domestic factors. One major factor was a decision by the United States Government to reduce the size of the sugar import quote due to expanding domestic production. Additionally, due to the differential in U.S. domestic prices, major soft drink manufacturers switched away from sugar to cheaper high-fructose corn sweeteners, leading to reduced demand for imported sugar. At the same time, the increased production in the E.U. and some developing countries, particularly Brazil, in the 1980s also depressed international sugar prices, reducing them to their lowest levels in forty years. At this time, sugar production was still primarily concentrated in the hands of state-owned sugar mills which experienced production difficulties in the 1990s. The combination of these factors led to a substantial decrease in Dominican sugar production.
1999 to Present
The Dominican Government decided on a dramatic change in policy to privatize its sugar holdings and in 1999 the government completed the privatization and shut-down of government-owned sugar operations. As a result, there are now three main private groups which continue to produce sugar for domestic consumption and export: Central Romana Corporation (Central Romana), Consorcio Azucarero de Empresas Industriales (CAEI), and Consorcio Azucarero Central (CAC).
In addition to the major producers, independent growers and colonos also supply raw sugarcane to major sugar mills that produce for export. Central Romana and CAEI, the two largest private producers of sugar, grow sugarcane independently and also purchase sugarcane – Central Romana from colonos and CAEI from independent growers. CAC does not purchase any cane from independent growers or colonos.
According to the Instituto Azucarero Dominicano (INAZUCAR), the Dominican Sugar Institute, since 2008 independent growers and colonos have harvested on average 32 percent of the sugarcane crushed. Many of the colonos are members of associations which represent their interests.
Until recent years, most of the harvesting was done manually. At the same time, the industry is moving towards greater reliance on mechanical harvesting. Indeed, the country’s producers now have the equipment to harvest most sugarcane mechanically, but continue with a higher percentage of manual cane cutting because the industry management recognizes that a more rapid elimination of jobs would have a negative economic impact on the workforce and communities. It also makes sense to use a certain percentage of manual cutting because of the hilly nature of some of the growing terrain in the Dominican Republic.