• Submitted by: manso
• Business and Economy
• 02 / 04 / 2011

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HAVANA, Feb 3 (Reuters) - Cuba's sugar harvest got off to a good start in January with all 39 mills scheduled to open now grinding and yields higher than expected, state-run radio said on Thursday, as the country strains to top a million tonnes of raw sugar by May.

"January was very important. Many mills opened early leading to the production of more sugar than at this time during the previous harvest," Juan Varela Perez, the country's top sugar reporter, said during his regular spot on national radio on Thursday.

"Yields were higher than the plan and way above last year at this time," he said.

Varela said on Tuesday yields averaged 10.43 percent the previous day.

Cuba has said there is less cane available than last year when the harvest came in at a record low 1.1 million tonnes, but it hopes improved yields and industrial efficiency will make up for part of the shortfall.

"Raw sugar production (in 2011) will be slightly less than this year due to a lack of cane," Economy Minister Marino Murillo, who is reportedly presiding over monthly industry meetings, said in late December.

A tour of western Havana and Matanzas provinces, as well as central Cienfuegos province, found harvesting in full gear, often with relatively new Brazilian sugar-cutting machines, Chinese trucks and support equipment from Holland.

Murillo, during a back and forth with National Assembly deputies in December, said a reorganization of the industry would begin when the harvest ends with an eye to obtaining reasonable results by 2015, which industry insiders said would be around 2.5 million tonnes.

Traders told Reuters that the Cuban sugar industry has no plans to import sugar nor export more than the approximately 400,000 tonnes it sends each year to China and minor amounts it sells elsewhere.

Cuba consumes an average 700,000 tonnes annually, however last year consumption was around 600,000 tonnes due to a reduction in the ration to the population and other measures.

Cuba, where sugar once was king, accounting for 90 percent of export earnings compared with under 5 percent today, has drawn up plans to reorganize the industry and allow foreign investment for the first time since mills were nationalized in the 1960s.

But the reorganization has yet to begin and negotiations with at least two foreign companies to jointly share administration of mills and share production for a limited number of years have dragged on and continue without results, foreign business sources said.

Source: www.reuters.com/article/2011/02/03/