Cuba’s sugar collapse threatens iconic rum industry as output hits historic lows

Cuba, historically a sugar powerhouse in the Caribbean, is seeing its raw sugar output fall to historic lows.

The island’s sugar production is expected to dip below 200,000 metric tons in 2025, the first time since the nineteenth century, according to official data and industry sources cited by the news agency Reuters

This represents a significant decrease from the 350,000 metric tons generated in 2023 and an even more striking drop from the 1.3 million metric tons registered in 2019.

AZCUBA, the state-run sugar monopoly, had planned a modest output of 265,000 metric tons for the current milling season.

However, as the season ends, production is approximately 100,000 tons short, according to media reports.

If these trends continue, 2025 will be remembered as a year of sugar scarcity in a country that previously dominated the global market.

Rum industry feels the squeeze

The rum business in Cuba, which relies on locally produced cane sugar, is already feeling the impact of the aftermath.

Distilleries face challenges in sourcing raw materials locally due to tradition and regulations requiring them to employ local products.

Production of sugar-based 96% ethanol alcohol — essential for distilling premium rum — has collapsed by 70%, dropping from 573,000 hectoliters in 2019 to just 174,000 in 2024, according to the National Statistics and Information Agency.

Output of another grade of alcohol used in some other rums also declined by a similar margin, signaling deepening challenges for the rum industry.

The same goes for all the other types of alcohol used for the other rum varieties.

Rum must be matured, thus producers rely on long-term planning and adequate stockpiles.

Many distilleries have relied on reserves, but with this year’s limitations, their ability to continue production is becoming increasingly dubious.

Root causes: mismanagement and external pressures

The sugar problem in Cuba is a reflection of the country’s overall economic struggles under Communist control.

The sector has been hit hard by decades of inactivity, resulting in significant bottlenecks of critical inputs like gasoline and lubricants.

US sanctions, combined with the COVID-19 outbreak, have heightened the pressure.

Several provinces have yet to reach production targets, indicating the dire situation.

The province that met its plan was Sancti Spiritus, with only 19,000 tons.

By contrast, Villa Clara, a bastion of the island’s sugar industry, achieved just 38% of its target of 27,000 tons.

Cienfuegos did marginally better but still underachieved, achieving around two-thirds of its 38,000-ton target.

Las Tunas province in eastern Cuba harvested only 5,000 tons, accounting for 11% of the expected yield.

The Communist Party blamed the outages on damaged industries, insufficient fuel, lubricants, and cleanliness issues, according to local media. These difficulties reflect broader systemic issues in the sector nationwide.

Looking ahead: no quick recovery in sight

As the summer rains arrive, output is projected to fall even more.

Sugar mills sharply cut output in May as wet weather made cutting and milling cane more difficult.

However, the implications extend beyond the economic arena. Sugar and rum are profoundly embedded in Cuban culture and identity.

This has caused a dramatic downturn that endangers not just export revenues but one of the country’s dearest industries.

The long-term sustainability of Cuba’s sugar sector, including rum production, is uncertain without significant reforms or external assistance.

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