February 14, 2018

By Duncan Turnbull, CEO of Pomeroon Trading

Cane sugar has dominated more than just the Caribbean landscape: it is fundamental to the socio-economic fabric of the region. Guyana’s largest ethnic group, the Indo-Guyanese, is descended from the indentured labourers who came to work on sugar plantations after 1850; the second largest, Afro-Guyanese, is descended from the 17^th century slaves of the Dutch West Indian Company plantations. The sugar industry built irrigation and drainage channels, thereby developing population centres in the low-lying coastal belts. And until recent years, the state-owned sugar company, GuySuCo, was considered the unofficial “social arm of the government”.

But today the Guyanese sugar industry is in terminal decline. Production in 2017 barely scratched 140,000 metric tonnes, the lowest in 27 years. The removal of duty-free access to Europe (to stimulate the EU’s own sugar beet industry) destroyed Guyanese sugar demand. Simultaneously, deteriorating field infrastructure and chronic underinvestment brought disappointing cane yields. Crippling labour strikes and unseasonable weather were the final straws. In the fields surrounding the Demerara River, this meant 4,000 job losses in the last 12 months alone.

As Guyana prepares to turn off the sugar industry’s life support, another industry is awakening. Coconut exports, in metric tonnes, have increased by a factor of 40 since 2008 and farm gate prices have tripled. Renee, an Amerindian father of five, barely breaks eye contact as he slices a fresh coconut in Georgetown’s main market: “it’s the Amazonian silt and Atlantic winds that make Guyana’s coconut water the best in the world,” he whispers to me.

With an estimated 21,000 acres of production and exports of 80 million coconuts annually, coconut is comfortably Guyana’s largest non-traditional crop. With the right investment, this should be closer to 280 million. The tropical climate and silted clay soils are ideal for coconut production; its proximity to the equator brings two rainy seasons and thus bountiful coconut water. Coconut palms, with their high canopy and un-branched trunk, lend themselves to intercropping and provide natural cover for high-value spices crops.

Yet to overtake sugar, there is a long way to go. A lack of investment since the 1980s led to “functional downgrading”, and rather than striving for innovative processing facilities (for coconut oil and water), Guyana has settled for exporting whole, de-husked nuts to neighbouring countries for processing. De-coupling growing and producing, fragments the value-chain – and leaves the lion’s share of the margin on the table for others.

Fresh investment – and an admirable array of public-private partnerships – aims to change this. The coming decade will see seismic opportunities for the Guyanese coconut industry: new seedling nurseries to provide the most productive palm varieties, consolidated coconut estates that can compete with counterparts in Asia, and large processing facilities targeting the North American market. Guyana will move from a regional supply basket to a processing and exporting powerhouse.

To succeed, Guyana needs to aim big; being content to supply the Caribbean is not enough. The global coconut market sales – led by North America – will double to $6 billion between now and 2020. Guyana – barely nine days sailing from Miami yet outside the Caribbean hurricane belt – is well placed to claim a slice of this pie. Investment will consolidate the most fertile land; improved quality standards will open new markets; and new processing facilities will capture more margin.

Pomeroon Trading is a vertically integrated coconut producer and processor in Guyana. They are rehabilitating a 700-acre coconut and spice estate on the Pomeroon River, building the Caribbean’s largest coconut nursery, and consolidating processing assets.

Duncan Turnbull is CEO and co-founder of Pomeroon Trading. He is a graduate of Stanford Graduate School of Business, California, and previously worked in the agriculture industry in the UK, Kenya, and Bhutan. He can be reached at Duncan@pomeroon.co or visit www.pomeroon.co.