Thursday, November 08, 2012

The story of sugar is not so sweet

from w
I don't know the real source of this article but it was posted in a blog called Fiji Today. It's about the current state of Fiji's sugar industry and it certainly isn't very sweet.  Our relatives in Labasa still plant and harvest cane but I don't think it's really a worthwhile business at all these days. Also some farmers missed out completely because the mills closed early and there's a lot of cane still standing in the fields.

    Lowest ever cane production…

Cane crushed this season will be the lowest ever on record, says NFU General Secretary, Mahendra Chaudhry.

FSC’s latest estimate of 1.6m tonnes is in fact likely to fall short by 50,000 tonnes when the Lautoka and Rarawai mills close later this month.
So far a total of 1.265m tonnes cane have been crushed. Penang and Labasa mills closed last month with record low figures – Labasa at 414,000 tonnes Penang at 143,000 tonnes. Compare this with the 2006 crush figures for these mills – Labasa 871,028 tonnes and Penang 289,347 tonnes.
In January FSC had announced a crop of 2.2 million tonnes with a sugar make of 220,000 tonnes. After the floods of January and March, the figures were revised down to 1.9 million tonnes, producing 190,000 tonnes of sugar. Then in September, this was further reduced to 1.7 million tonnes but a forecast for sugar make was not released by FSC.
And now, just a week ago, another revision – this time it is down to 1.6 million tonnes of cane but quite astonishingly, a sugar make of 180,000 tonnes, according to FSC chairman Abdul Khan.
This is plain hoodwinking – a sugar make of 180,000 tonnes is just not possible from a crop of 1.6m tonnes under the present milling conditions. At best, a sugar make of 150,000 tonnes is likely.
Coups contribute to the decline
Since the military takeover almost 6 years ago, the sugar industry has taken a nose dive with both cane and sugar production drastically reduced. Cane crushed is down 50% – from 3.3m tonnes in 2006 to just 1.6m tonnes this season.
Sugar produced is down from 330,000 tonnes to an estimated 150,000 tonnes this season. THIS is BAD NEWS.
The table below, showing industry data over the last 18-years, does not paint an encouraging picture. In the five years since the 2006 military coup, some 3000 (2939) growers have exited. But the situation is even more disturbing when one considers that from 1994 onwards 10,473 growers have left the industry for various reasons, and that this declining trend has not been arrested. 
Industry data 1994-2012                                    (Source: FSC annual reports)
2012 (est)1.60150na
The rate at which growers are exiting is a cause for worry. There are a number of reasons for it and it would be difficult to reverse the trend, say NFU officials who have studied the situation.
“The writing is on the wall. It is only a matter of time,” say industry sources.
NFU general secretary Mahendra Chaudhry made an extensive tour of the cane belt in Labasa last week. He met with growers from several sectors to ascertain the causes underlying the significant drop in the crop size.
It is to be noted that the Labasa Mill crushed 871,028 tonnes of cane in 2006. The crush this season, at the close of the mill last month, was less than half at 414,000 tonnes.
The growers Mr Chaudhry talked to identified a number of reasons for the sharp drop in cane production. These are:
• political instability and violence generated by the coups
• uncertainty over land leases, coupled with escalating land rents and premium demands from TLTB
• low cane price
• high cost of harvesting and transportation of cane to the mill, particularly from the three sectors in Seaqaqa
• high costs of fertiliser and weedicides
• milling inefficiency and breakdowns which disrupt orderly harvesting of cane thus forcing farmers to incur additional costs
• the arbitrary manner in which the industry is being run by the Sugar Ministry and FSC
• the disbanding of industry institutions in which farmers had a voice
• reluctance of the younger generation to engage in cane farming on account of its problem-ridden nature and low financial returns
“I was saddened to see the number of families who have abandoned their farms and left to settle in Viti Levu. In some cases, entire settlements have been reduced to less than half.
“Labasa is depopulating rapidly and all because of uncertainty over the future of the sugar industry,” Mr Chaudhry said.
Meanwhile, industry officials continue to ignore the declining situation on the ground. Sugar Permanent Secretary Manasa Vaniqi says “FSC’s mill efficiency improvement had significantly boosted the confidence of cane growers in the country and signaled a huge step forward for the industry as a whole”. (FT 8/11/12).
And FSC chief executive Abdul Khan gloats about the Rarawai and Lautoka mills crushing 1.021 million tonnes cane this season (2012) and producing 102,000 tonnes of sugar.

 These two mills used to individually crush as much. In 2006, for instance, Rarawai mill crushed 1.03 million tonnes cane and produced 105,000 tonnes sugar; Lautoka Mill crushed 1.03m tonnes cane and produced 93,392 tonnes sugar.

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