Thursday January 24, 2019
Home Business Fiji Sugar in...

Fiji Sugar industry faces bleak future

0
//
Fiji
Image source: youtube.com

Auckland, New Zealand: The sugar industry of Fiji degrades due to damage from Cyclone Winston in February and an impending expiry of crucial low-tariff exports deal with the European Union.

Winston, one of the strongest cyclones ever in the South Pacific, slammed into Fiji on February 20. The storm claimed 44 lives in Fiji and caused damage valued at $226 million, including $48.4 million to the sugar industry, according to preliminary estimates by the Fiji National Disaster Management Office.

A village destroyed by Cyclone Winston on Fiji's Koro Island. Image source: asia.nikkei.com
A village destroyed by Cyclone Winston on Fiji’s Koro Island. Image source: asia.nikkei.com

The industry, the country’s largest employer, employs about 40,000 people, with up to 250,000 of the country’s 881,000 population relying on it when extended families are included. About 80% of the current crop was destroyed, and two of four crushing mills run by the state-owned Fiji Sugar Corporation were damaged.

Fiji Prime Minister Voreqe Bainimarama said the cyclone was a terrible blow, coming just after a glowing economic report on Fiji from the International Monetary Fund. “Now all of that may be in doubt,” he told diplomats.

The IMF report, released on February 5, said Fiji was “enjoying strong growth momentum, due to higher investment, robust tourism and strong remittances, supported by an improvement in the terms of trade.”

More presciently, the IMF noted that significant risks to growth were “largely related to external developments, including Fiji’s exposure to natural disasters.” The rains brought by Winston followed two years of drought.

Praveen Singh, the leader of a cane producers’ association, said the combination of the drought and Winston had created a bad situation ahead of the harvesting season between June and September. “We may have to forego the 2016 harvest and plan for a bigger harvest next year,” he said.

Last year’s crop of 1.84 million tons of cane produced 222,000 tons of raw sugar, one of the country’s lowest harvests. In 1996, a record 4.4 million tons of cane was crushed. Around 75% of Fiji’s arable land is planted with sugar cane and the crop is Fiji’s biggest export, valued at $52 million in 2015.

A sugar cane train in Fiji delivers the crop to the mill. Image source: asia.nikkei.com
A sugar cane train in Fiji delivers the crop to the mill. Image source: asia.nikkei.com

Most of Fiji’s sugar exports go to the UK, where it has preferential access to EU support measures, and prices are up to four times the global sugar price. The EU is due to scrap the measures next year, leaving Fiji to compete for head on with sugar producing giants such as Australia, Brazil, India, and Thailand.

EU-Pacific ambassador Andrew Jacobs has hinted that Brussels might develop proposals to help Fiji. “The EU recognizes that the sugar industry is very important to Fiji,” he said, without offering specific measures.

However, Fijians appear divided about whether the industry has a future, and what its long-term impact will be on the economy, relations between the country’s indigenous Fijian and ethnic Indian population groups, and stability in the coup-prone political system.

About 16,000 cane growers are Indian, according to the Fiji Bureau of Statistics.

Addressing the International Sugar Organization in November, Bainimarama said the future for Fiji sugar after the end of the EU deal would lie in extracting “the maximum sugar possible from every stick of cane.”

“We must extract every economic advantage we can from the sugar cane plant and the more productive and resilient varieties we continue to develop,” Bainimarama said. India has provided Fiji with a $70 million line of credit to build a co-generation plant, but a small pilot plant was affected by Winston.

Bainimarama said the industry was irreplaceable. “It cannot and must not be allowed to decline… [despite] the odds that are stacked against us; we do not intend to give up on sugar cane in Fiji,” he said.

Institutional analysts said the industry faced major structural problems. The IMF report also said that “modernization of the industry is urgently needed to improve international competitiveness.”

Padma Lal, an economist who has specialized in studying the Fiji sugar industry, said the damage to mills, irrigation and drainage systems, roads and rail links made it imperative for Fiji to diversify its rural economy away from sugar by increasing production of vegetables, poultry, ducks and goat meat.

“I would use this opportunity to rationalize the industry, however painful it may be,” said Lal.

(The article was first published in asia.nikkei.com)

Next Story

Confidential Facebook Documents Seized By The UK Parliament

Lawmakers from seven countries are preparing to grill a Facebook executive in charge of public policy.

0
Facebook, data
Facebook staring at bigger problems this year, warns analyst. VOA

Britain’s parliament has seized confidential Facebook documents from the developer of a now-defunct bikini photo searching app as it seeks answers from the social media company about its data protection policies.

Lawmakers sought the files ahead of an international hearing they’re hosting on Tuesday to look into disinformation and “fake news.”

Facebook, India, Fake News, Hate Speech, Russia, Sheryl Sandberg
An advertisement in The New York Times is displayed on Sunday, March 25, 2018, in New York. Facebook’s CEO apologized for the Cambridge Analytica scandal with ads in multiple U.S. and British newspapers. VOA

The parliament’s Digital, Culture, Media and Sport Committee has “received the documents it ordered from Six4Three relating to Facebook,” Committee Chairman Damian Collins tweeted on Sunday. “Under UK law & parliamentary privilege we can publish papers if we choose to as part of our inquiry,” he said.

The app maker, Six4Three, had acquired the files as part of a U.S. lawsuit against the social media giant. It’s suing Facebook over a change to the social network’s privacy policies in 2015 that led to the company having to shut down its app, Pikinis, which let users find photos of their friends in bikinis and bathing suits by searching their friends list.

Facebook, India, Fake News, Hate Speech, Russia, digital
A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France. VOA

News reports said the UK committee used its powers to compel an executive from Six4Three, who was on a business trip to London, to turn over the files. The files had been sealed this year by a judge in the U.S. case.

Also Read: Social Media Laws Should Be Tightened: Germany

Lawmakers from seven countries are preparing to grill a Facebook executive in charge of public policy, Richard Allan, at the committee’s hearing in London. They had asked for Facebook CEO Mark Zuckerberg to appear in person or by video, but he has refused. (VOA)