Sugar Cane in Costa Rica

Overview     

Costa Rica’s cane and sugar production declined to 3,461,678 MT and 361,837 MT respectively in the 2008/2009 crop year. The 2009/2010 crop is expected to rebound to 3,900,000 MT of cane and 382,000 MT of sugar. Lower input costs and higher prices during the 2009/2010 crop helped producers during the growing and harvesting periods. Also, Costa Rica joined CAFTA-DR in January of 2009, eliminating part of the uncertainty that had affected farmer’s planting decisions during the previous crop year. Although area planted is forecast to remain similar in the next crop year, sugar production could decline as a result of adverse weather conditions forecast for 2010.

Production

Costa Rica’s sugar industry is made up of approximately 7,000 producers and 15 sugar mills, distributed in 6 regions of the country. However, more than 50 percent of cane production is concentrated in the pacific region, mainly in the province of Guanacaste. The majority of the sugar mills are owned by Costa Rican nationals, although at least one company is owned by Guatemalan investors. The Costa Rican Sugar League (LAICA) is the institution that regulates the relationship between producers and millers. LAICA is also involved in the marketing and sales of sugar for domestic consumption and for export.

Based on preliminary data from LAICA cane production will increase 12.6% to 3,900,000 MT during crop year 2009/2010. Higher cane production is the result of increased area planted and better weather conditions in the main growing areas. However, some sugar cane diseases continued to affect several production regions. A disease known as “orange rust” caused by the fungi Puccinia kuehnii has caused serious problems in susceptible cane varieties primarily in the Southern production region of Perez Zeledon, in San Carlos in the North, and to a lesser extent in the Central Valley. Other diseases that affected production included joboto (phyllophaga spp.) and “snake’s spittle” (Aeneolamia spp, Prosapia spp).

Area Planted

Area planted of sugar cane is estimated to be 54,000 ha. with 52,000 ha. being harvested. Area planted increased slightly in 2008/2009 as a result of reduced uncertainty among producers regarding CAFTA-DR. However, sugar mills, primarily in the Central part of the country are struggling in order to keep sugar area planted from declining, as competition from urbanization and high land prices are slowly taking area away from sugar. Mills in the Guanacaste region continue to lure producers of other crops (mainly rice) to shift to sugar cane production. Sugar production is facing increased competition as more producers planted rice in Guanacaste as a result of Government policies that provided incentives to rice production.

Yields

Data provided by the Costa Rican Sugar League (LAICA) indicates that the average sugar cane yield is expected to increase from 71.2 MT/ha. in 2008/2009 to 72.0 MT/ha. in 2009/2010. The average sugar yield was 103.98 kg/ton in 2008/2009 and it is expected to decline to 100.87 kg/ton in 2009/2010.

Consumption 

Costa Rica’s sugar consumption was 228,286 MT in 2008/2009, and it is forecast to increase to 238,000 MT in 2009/2010. Per capita sugar consumption was 56.33 kg. in 2007/2008. Costa Rica’s per capita sugar consumption is one of the highest in the region, although it has declined from a record 59.2 kg in 1997-1998. Total sugar consumption is divided almost equally between direct consumption and industrial use

Exports

Sugar exports amounted to 108,699 MT in 2008/2009. Costa Rican sugar exports are expected to reach 187,840 MT during the 2009/2010 crop year. The main destination for Costa Rica’s sugar during the 2008/2009 crop year was the United States. The majority of exports during 2009/2010 are expected to go to Russia, the United States, and Canada, in that order. The trend in Costa Rica has been to fill the US quota first and then export any surplus to the world market.  In 2009/2010 Russia was the main destination for Costa Rican sugar however this changes yearly.  Exports to the United States include the U.S. WTO, and the CAFTA-DR sugar quotas, and sugar for re-export. Costa Rica is expecting the U.S. to reinstate its CAFTA-DR sugar quota for 2010. This quota was suspended as a result of Costa Rica’s failure to pass legislation (not directly related to agriculture) that Costa Rica had agreed to pass prior to CAFTA-DR’s approval. The legislation was recently approved.