High

Production Costs Too High Fiji Sugar and World Overproduction

pWO statements of .interest to L the Fiji sugar industry were made during June. One was ade in London and was to the feet that there will be a tre endous surplus of free-market gar in the current crop year. The her was made in Sydney, by Mr.

R. Knox, chairman of the jlonial Sugar Refining Company, id said that since the war Fiji id changed from a low-cost pro icer to a high cost producer and at in that change there was a eat threat to the Fiji economy.

At present and for the next year so, the Fiji producer is protected an agreement with the British OF. The price is fixed annually November and announced shortly terwards this year it was an unced in January and the price ed was £3B/10/- Stg. per ton. lis meant that the Fiji cane- Dwers the majority of them dian received something like Fijian per ton for their cane.

Fiji, like other British sugar educing countries was given an port quota which would be pur ased for the fixed price, and an ditional tonnage which could be d at world market prices. Fiji’s ed-price quota is 125,000 per num —which Fiji has been unable fill since the sugar agreement ne into operation; and the dition tonnage to be sold at

world market values was set at 45,000 tons.

The alarming trend in Fiji sugar production is that while wages, prices and every other cost relating to the industry have risen fan tastically since 1939, the production of sugar per man has not risen at all. While the industry may feel that it has a certain amount of protection under the sugar agree ment, the figures quoted from London (estimated crop for year ending August 31, 1952, 7,335,000 metric tons; estimated require ments, 4,950,000 metric tons) should give it food for thought.

Those surplus 21 million tons of sugar have to be brought into any calculations because it has yet to be seen how the various MOF agreements will work in a world that is oversupplied rather than undersupplied — as has been the case for the past 10 years. When this year’s sugar price was an nounced in January, it was almost the same as the free market price.

Fiji has to sell her sugar in the markets and at the same prices as other sugar producing countries.

If present trends continue, she might find herself in the same position as other Commonwealth countries where demands from the workers in the industry have out stripped production—that is, that she has priced herself out of world markets and her main means of livelihood.

In 1951 the CSR Co.’s five mills in Fiji produced 113,000 tons of raw sugar. In 1952, in spite of dry con ditions during part of the growing season, it is expected that the total production will be greater than any of the three last seasons.