Bureaucracy’s error

is sugar windfall

As the region’s relations with the US bore fur ther strain with the widely held view that the Reagan administration would not sign the SPNFZ protocols and drastic cuts in import quotas, Fiji has quietly increased its sugar quota.

Fiji’s allocation in the heavily protected US sugar market had been 12,012 tons last year.

This year, it will more than double to 25,190 tons. At the same time the Australian quota was slashed from 142,428 to 75,000 tons while that of PNG fell from 12,500 tons to 7,500 tons.

Fiji’s increased quota is the Washington bureaucracy’s way of admitting mistakes over the previous years in fixing amounts..

Officials who set quotas had been in error over the years in fixing the Fiji tonnage below planned levels.

This year, they have cor rected the mistakes with Fiji being granted an extra 17,000 tons.

That’s a US$3.4 million error small potatoes in Washing ton but a welcome correction in Suva.

The world price of sugar is in the 5.5 to 7.5 cents per pound range depending on delivery date.

The subsidy price in the States, demanded by US pro ducers of cane and beet sugar, is about 18 to 20 cents.

So, after the costs of shipping and import duties, a foreign producer such as Fiji profits at the rate of about ten cents per pound by being included in the quota.

Thus, 17,000 tons represents about $3.4 million.

The Australian and PNG quotas were cut by about 40 per cent The PNG quota of 7,500 represents the absolute rock bottom allocation for the smallest of the producers, just

as 12,000 tons had been the lowest allocation available last year.

The PNG allocation still rep resents about $1.5 milion.

However this is still a 30 per cent reduction in the quota and will mean that foreign exchange earnings from PNG’s deve loping Ramu Sugar Ltd will

drop from A 56.4 million to As4.B million.

Ramu general mamager Mr Brian Dyer said he was dis appointed at the cut but pleased that, at least, PNG had retained a quota.

But, he said, there was no need for Ramu Sugar to feel aggrieved as the quota was

government to government.

Meanwhile the company was well ahead with an ambitious replanting program, he said, after a mystery disease de stroyed a large part of the Ramu crop.

Mr Dyer said the company hoped to be back to full pro duction next year.