Fiji: EU lessens reduction of Fiji sugar prices

SUVA, Fiji (Fiji Times, Aug. 16) ­ The European Union has decreased the price reduction scheduled on local sugar export from the initial 20 per cent to five per cent.
The reduction which was to have come into effect from 2005-2006 has been deferred to 2006-2007.
Prime Minister Laisenia Qarase told Parliament yesterday that progressive reductions would be spread over a longer period to 2010. By then, he said, the price would have come down by 39 per cent.
“So while we are still faced with the fact of a drop in the favourable prices we have enjoyed, we now have a little more breathing space to adjust,” Mr Qarase said.
Mr Qarase said the drop in prices was the result of negotiations led by the Foreign Affairs Minister Kaliopate Tavola and Fiji’s ambassador to the European Union Ratu Tui Cavuilati. However, he warned that sugar production and milling by itself could not be viable even when the reforms and efficiencies to the industry were fully implemented.
He said one projection was that the Fiji Sugar Corporation was expected to lose $11million annually from 2008 onwards.
And he cautioned that Fiji has fallen behind its schedule of restructuring the sugar industry by one year.
“We must, therefore, move with greater speed to make our sugar industry more competitive,” he said.
“There will be no hope in the global market for those who cannot adjust.”
Reacting to Mr Qarase’s statement, Opposition Leader Mahendra Chaudhry cautioned against laxity.
Speaking in Parliament, Mr Chaudhry said even though the price reduction was meant to be good news, the country should prepare itself to meet the demand that was required to produce high sugar yields and the maintenance of any efficient industry.
He said the Government’s projections to produce 4.25million tonnes of sugar by 2007 was far- fetched because the current reforms to sugar production would not yield results until 2010.
For this projection to be realised Mr Chaudhry said it would only take sensible policies and assistance to farmers.
He asked the Government to extend the $10,000 farming assistance to include non-indigenous farmers.
On the Government’s forecast that the Fiji Sugar Corporation would lose $11million annually due to the fall in sugar production, he said it was one area which needed attention.
The National Farmers Union however, has welcomed the one-year extension. Union president Jain Kumar agreed with Mr Qarase that the extension was good for the farmers as it gave them more breathing space.
“It would give the farmers one more year to plan for what they would do to sustain themselves when the price of sugar falls,” Mr Kumar said.
“We are keeping our fingers crossed that the deferment would be forever.”
Fiji Sugar Corporation chief executive Abdul Shamser said it would give everyone involved in the sugar industry especially the growers ample time to prepare. But he doubted that there would be a further deferment.
The Fiji Sugar Marketing is trying its best to ease the pain for farmers when the sugar price is reduced.
Managing director John May said they were aware of the deferred reduction of sugar price.
But he said the level of reduction and for how long it would go on for was still a proposal.
“The reduction is certain,” he said.
Mr May said the first cut in price would be done in 2006 and could go on until 2009.
He said they were working with other ACP countries to influence the European Union on its decision.
Tuesday, August 16, 2005
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