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Struggling Sugar Industry: What’s Behind the Decline?

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Cane production remains below the target of 2.5 million tonnes and continues to decline.

Sakiusa Tubuna, chairperson of the Standing Committee on Economic Affairs, made this statement while presenting the consolidated review report of the Fiji Sugar Corporation’s (FSC) 2020-2023 annual reports in Parliament last week.

Tubuna highlighted the sugar industry’s crucial role in Fiji’s economy, contributing about 0.9 percent of the GDP and generating 5.7 percent of domestic exports in 2022, according to provisional data from the Reserve Bank of Fiji.

Over the four years under review, the committee noted a significant decline in cane production from 2020 to 2021, followed by a 16 percent increase from 2021 to 2022.

The committee identified several factors contributing to the decline in sugar production. These include farmers’ lack of interest in cane farming due to its perceived unprofitability, inconsistent cane supply to the mill leading to underutilization of mill capacity, a decline in cane quality, the absence of KPIs, and the lack of strategic plans to forecast the corporation’s future targets and outputs.

The committee noted FSC’s reliance on government grants for its operation given its debt levels and recurring losses. However, they strongly suggested that the corporation develop proper KPIs for all sugar-related sectors to ensure the economic viability of the sector.

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