#header-inner img {margin: 0 auto !important; #header-inner {text-align: Center ;} Fiji Coupfourpointfive: Sugar loses its econimic sweetness

Saturday, August 21, 2010

Sugar loses its econimic sweetness

But who is right, Reserve Bank or National Farmers Union

Two different takes on the ailing industry:

RBF warns on sugar 

August 21, 2010, Fiji Times
SUGAR production does not look promising this year and expectations are that it will decline to levels lower than last year.

Reserve Bank governor Sada Reddy said the problem was because of lower cane production caused by low rainfall. He said the poor performance was also because the mill upgrade works had not "delivered the efficiencies that were expected".

"Sugar production does not look promising," Mr Reddy said. "Sugar production is expected to decline further significantly this year due to continuing milling problems and drop in cane production."

All four of the country's sugar mills have been plagued by frequent breakdowns since the start of the 2010 season in June.

The farmers have complained of huge losses because of disruptions in the harvesting program.

And from the Fiji Labour Party website
(posted August 19)
THE FUTURE of the sugar industry looks grimmer by the day with the first shipment of sugar exports long overdue and sugar extraction rates continuing to deteriorate, says the National Farmers Union.

This year’s crush has been a disaster from the very start. All four sugar mills have been plagued by frequent stoppages owing to mechanical breakdowns. This has, in turn, resulted in serious disruptions to the cane harvesting programme causing huge losses to farmers.

“We have to retain, accommodate and feed cane cutters engaged from far away villages. The disruption to cane harvesting programme as a result of mill breakdowns means cane cutters spend most of their time idling away because harvesting gangs are shut down,” complained a Nadi farmer.

“Most cane cutters earn less than $40 in three weeks because of idle time. Many of them have left because they cannot sustain their families in the villages on an income of around $13 a week.

“When they leave, the farmer loses the advance paid to them at the time of their engagement which can be as high as $1000 per cutter,” he said.

As of today, not even a single shipment of export sugar has left our shores. “We are into the third week of August – never has export shipment been delayed for so long,” according to FSC shipping services.

Meanwhile, poor TCTS ratios at the mills are causing grave concern among farmers. FSC is not releasing official figures for cane crushed and sugar made, but our sources have been able to ascertain the following:

• Rarawai Mill – 21 tonnes of cane to make one tonne sugar

• Penang, Labasa and Lautoka – 14 tonnes cane to one tonne sugar

The sugar recovery rate is extremely poor. The average TCTS should be between 8-9 if the mills were performing optimally.

Based on these figures and making due within-season adjustments, a sugar make of around 120,000 tonnes only is likely from an estimated crop size of 1.9 million tonnes of cane.

However, even this may not be possible because of the effects of the prolonged drought which have gripped the cane belts of western Viti Levu and Vanua Levu.

The most important question a cane farmer will ask in the wake of the current disaster is: How much can I expect to be paid for a tonne of cane this season?

The short answer to that is: around $45 a tonne.