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$1bn under threat

Fiji Times, Fiji

$1bn under threat

By Timothy Naivaluwaqa

1 July 2008

The Fiji Sugar Corporation might not be able to meet the first quota under the billion-dollar export deal with the European Union if cane supply problems continue.

FSC acting chief executive Deo Saran said the corporation could end up forking out more money if the required tonnage was not available when the shipment is due. He pleaded with growers throughout the country to improve and stabilise supply so the industry could meet its first shipment schedule for this month.

"Our main concern at the moment is the first shipment scheduled for mid-July. If the weak cane supply continues, it would have an impact on our export commitment. We might to have to pay the ship’s waiting costs if the shipment is delayed," he said.

The industry is expected to export between 25,000 and 30,000 tonnes of sugar to the EU market.

Mr Saran said if supply trends continued, it could affect their first export commitment under the seven-year deal between FSC and traditional EU market buyer, Tate & Lyle.

Tate & Lyle is the largest cane sugar refiner in the EU and a leading trader in molasses and world market sugars. Tate & Lyle has been trading with FSC since the inception of the African-Caribbean Pacific-EU Sugar Protocol in 1975.

The contract secured by FSC is part of the Economic Partnership Agreement (EPA) between the European Union and ACP States under the union’s sugar regime reform that would supersede the sugar protocol from October next year.

The contract that consists of the export of about 300,000 tonnes annually is valued at about $1billion.

He said while they were confident of fulfiling their annual export commitment, production due to poor cane supply cast a cloud of doubt over the first shipment quota.

Mr Saran said since the season started four weeks ago, all mills have been plagued with poor cane supply. He said many mills closed operation weekly because there was not enough cane for crushing.

He said they hoped supply problems would be rectified soon to enable the industry to meet its export commitment.

"Rarawai Mill had some problems in the plant but there has been disruptions to operation because of poor cane supply.

"Given the position we are in, we would be able to meet the first export quota if cane supply is improved and maintained."

Mr Saran said their officials were working closely with councillors from the Sugar Cane Growers Council to boost cane supply to the mills.

Mr Saran said it was vital that growers took full advantage of the good weather conditions experienced throughout the country.

He said there should be no excuse for the farmers for poor cane supply because road and weather conditions had improved significantly.