• Recent strike action in Cali has suspended Colombian sugar production.
  • Sugar exports have also stopped.
  • Domestic prices are rising as a result and are approaching a one-year high.

Strike Action in Cali Impacts Sugar Production

  • The Colombian government attempted to implement a tax reform to balance out the economic impact of COVID-19.
  • This was rejected by the population and resulted in national strike action on 27th April.
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  • All 12 mills in the Cauca Valley, Colombia’s main sugar region, have suspended operations too.
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Domestic Prices Rise with Production Halt

  • Now the mills have suspended operations, Colombia doesn’t have enough sugar to satisfy domestic demand.
  • Its sugar prices are therefore on the rise.
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  • However, the rally started in late February when Colombia’s rainy season arrived two months earlier than usual.
  • During rainier periods, it can become very difficult to enter the fields and harvest enough cane for the mills.
  • Therefore, a longer rainy season means these logistical issues are prevalent for even longer and weaken supply to a larger extent.
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Strikes Impact Sugar Exports Too

  • The strike action has forced many roads to be closed.
  • This means sugar cannot easily be transported to the ports.
  • Some roads are intended for the exclusive use of essential goods, however.
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  • It’s difficult to know how long this situation will go on for, but the countries most affected by this will be Peru, the USA, Chile and Haiti.
  • However, it shouldn’t run into June as the region is in a State of Crisis, which calls for immediate intervention.
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Opinions You Might Be Interested In…

  • Market Talk: Floods in Colombia’s Main Sugar Region

Explainers You Might Be Interested In…

  • Czapp Explains: The Colombian Sugar Industry
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Stephanie Rodriguez

Stephanie graduated from Babson College in 2020, with a bachelor’s degree in Operations Management and Data Analytics. She joined CZ in 2020 for a one year internship where she focused on developing dashboards, content and expanding our network in the Americas (excluding Brazil). Stephanie is responsible for writing content and capturing data for the Americas (excluding Brazil), presenting our market view to clients, and working on different consultancy projects.

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