Sugar industry tastes bitter

The sugar industry, once the mainstay of Fiji’s economy and the most significant icon of the Colonial Era, has dried itself of importance, although the current government is doing its best to resuscitate and reinstate its position.

Production has continued to drop over the past several years and according to official figures, the estimate for the current year is 207,000 tonnes, down from 208,000 (2008), 237,000 (2007) and 310,000 (2006).

Experts said natural disasters such as flash floods apart, the industry has been in a state of neglect for more than a decade.

The foundation of the current sugar industry began in the early 20th Century, when the Colonial Sugar Refining Company (CSR) became the major player. Its dominant position continued until 1971 when the indigenous Government acquired major shares, leading to the formation of the Fiji Sugar Corporation in April 1973.

Three years later, the Fiji Sugar Marketing Company was established.

Reserve Bank of Fiji Governor Sada Reddy was hopeful that the completion of the ongoing upgrade to the sugar mills would see the industry turn around.

He conceded that this alone would not lift the industry out of its quagmire.

“We must continue with great urgency in bringing about all other necessary reforms in the industry to ensure that we have a viable and enduring industry.

The Government and the key stakeholders in the industry are working hard to resolve some of the long standing structural and other issues the sugar industry has been faced with for a number of years,” he said.

A number of experts told Indian Newslink that the health of the sugar industry had a direct impact on the health of the Fiji economy and that sugarcane production, storage and distribution must meet with acceptable world standards of quality and efficiency.

The recent decision of the European Union to reduce preferential prices for Fiji’s sugar exports to its territory has also had its toll.

With the EU sugar prices expected to decline by 25% in October, managers of the sugar industry in Fiji have to address the expected cumulative effects.

Said Mr Reddy: “Fiji has enjoyed preferential sugar prices, which were three times higher than the world market prices. With the reductions, this will now be about 1.5 times the world market price. We therefore have to adapt and adjust quickly to overcome this major reduction in sugar prices.”

The Fijian Government has lowered its income forecast from sugar by 29% this year, compared to growth of 34% in 2008.


Source:indiannewslink