Sugar industry losses mount

[posted 27 Aug 2009,1030]

Fiji’s four sugar mills had crushed around 700,000 tonnes by the end of last week – roughly 30% of the estimated crop of 2.3million tonnes this season.

FSC is not releasing figures for the amount of sugar made because of malfunctioning of its mills all of which, except for Penang, continue to have frequent breakdowns and are crushing at well under capacity.

As a result of the malfunctioning of mills, the sugar extraction rate is extremely poor with TCTS ratio (tonnes of cane to tonne of sugar) currently believed to be around 13:1. At this time of the year the TCTS should be around 8.1 because weather conditions are optimum and the sugar content in cane is high. With five additional tonnes of cane required to make one tonne of sugar, the industry is losing millions.

FSC continues to cheat the farmers, forcing them to pay a heavy price for its own milling inefficiencies. One wonders why despite the $86 million upgrade of the mills by the Indian Sugar Technology Mission, the mills are still performing so dismally.

The National Farmers Union reported last week that up to the date of the last sugar shipment, the industry had lost $12 million due to poor extraction and frequent mill breakdowns. Also, there was a shortfall of around 10,500 tonnes in the two shipments made to the UK so far.

Based on the poor performance record of the mills, it is estimated that losses to the industry could well exceed $60 million of which the farmers will suffer $42 million (70%). This is gross injustice for which the growers will need to seek redress.

FSC should be held accountable and responsible for losses caused as a result of its negligence and incompetence. It must, in fairness, compensate the cane growers for all such losses. But the big question is: will it happen? Will the FSC be held accountable?

The answer seems a no, judging from the interim government’s directives to dissolve all the industry institutions where the growers had a voice. The final blow to the growers is the directive to dissolve the Sugar Cane Growers Council. With the demise of the SCGC, will go any hope of the growers obtaining justice as the major partner in an industry which is of vital importance to Fiji’s economy.

In view of all this, the big question now is whether the industry ill survive its current situation and the increasing marginalisation of the growers.