More bad news for sugar

[posted 3 Sept 2009, 14.30]

 The reported $37 million loss for the financial year 2008/2009 is the biggest ever incurred by the Fiji Sugar Corporation.

While attempts have been by the Corporation’s CEO to underplay the huge loss by attributing most of it to abnormal items, it is a well known fact that FSC is in serious financial trouble. It has, for instance, asked for an extension of a five year moratorium on its loan repayment to the Exim Bank of India.

The loss cycle of the Corporation is likely to continue into the future throwing doubts on its long term viability. Three of its four mills are plagued by chronic mechanical problems.

FSC has borrowed heavily and is having difficulty meeting its debt repayment obligations. It is only able to raise long term loans and short term finance on the back of government guarantees.

Latest figures show that crushing is way behind schedule and that only 34% of the estimated crop of 2.4 million tonnes had been crushed by 31^st August.

The optimum crushing period is almost over, and from October with the onset of the hot season, the sugar content of cane will begin dropping.

FSC is providing absolutely no information on the sugar manufactured despite repeated requests from the growers’ organisations. This secrecy confirms suspicions that the sugar extraction rate is extremely poor with cane juice filtering into mill mud or converting to molasses. Or, is simply being dumped into the Labasa and Ba Rivers and into the ocean in Lautoka. No wonder the two sugar shipments in July and August were short by some 11,000 tonnes!

The media this week has reported that the Health authorities in Labasa have begun proceedings against FSC for polluting the Qawa River with cane juice. The residents of Ba have been complaining for weeks now to the Town Council and Health authorities to take similar action against FSC for polluting the Ba River but so far their calls have fallen on deaf ears.

One can now see why the Sugar ministry has directed the dissolution of the Sugar Cane Growers council. It is a case of blatant collusion with FSC to remove transparency and accountability from the industry and place it in complete control of the miller.

This move will completely deprive the cane growers of their right of representation and oversight of the industry in which they are supposed to have a 70% stake!