Luis Ayala, Editor
Luis Ayala, Editor of "Got Rum?" magazine, Rum Consultant and Founder of The Rum University.
The Fight for Rum
By now everyone in the industry knows (or should know) about the rum war over the subsidies offered by the US government to producers in Puerto Rico and the USVI, but there is another rum war brewing that can have a long-lasting impact on the landscape.
One of the unpredicted side effects of a world that is going “green” (that is, a world seeking ever more environmentally-friendly choices), is that some rum producing countries are giving incentives to their distilleries to produce fuel-grade ethanol, instead of food-grade rum from their sugarcane (or its derivatives). As a result of this tendency, there is a growing need for rum in many countries, one that is threatening to increase the price of aged rums in the very near future.
The underlying dark cloud behind these already gloomy threats is the fact that in recent years the international price of sugar has been inching back towards its record highs. What will happen when sugar gains back its lost margin? The cost of producing rum from juice or molasses will go up as well, coupled with an estimated increase in demand for fuel grade ethanol. If the demand for electricity also increases (and there is plenty of evidence this will be the case), the excess steam from the sugarcane factories will have a better ROI when applied to generating electricity rather than to operating the distilleries.
Rum has faced its share of obstacles before, and today’s version of rum is the result of the adaptations needed to overcome them. These new challenges are unlikely to kill the resilient spirit of rum, but are very likely to force it into adapting even further in order to survive.
Cheers!
Luis Ayala, Editor and Publisher of "Got Rum?" magazine