Nippon gives Tonga

Trade Winds

Nippon gives Tonga new hope in squash

ANEW Tongan-Japanese joint

venture has been set up to orga nise the export of squash from the South Pacific kingdom, after growers last year found that freight and other costs of sending the crop to Japan ate up all their profit.

Nippon Tonga Enterprises Ltd is a

partnership between two Tongan firms, Lavaka Ata Estate Ltd and Gateway En terprises Ltd, and Japan’s Tokai Kogya Co Ltd. The company has said it will arrange for the export of squash and other produce to Japan, and will also be involved in equipment hire, construction and vehicle imports.

A recent Times of Tonga report showed that, of recent shipments to Japan, growers received T 52.68 million but that it cost them T 52.56 million to land the crop in Japan. And when in terest and other indirect costs were added, it was expected that the farmers would actually lose money.

Squash exports to Japan began in

1987 when a 400 tonne shipment brought US$ll5,OOO for the growers.

Then the 1988 shipment rose dramati cally to 1400 tonnes, which led to plans for a major expansion in 1989 and the establishment of squash as a major and lucrative export crop.

The government came up with T 5500,000 to help cover the costs of sending the crop to Japan, but the 1989 crop by its very size raised prob lems about finding enough money to

ship all that the growers had produced in the expectation of high rewards.

Altogether, 4064 tonnes was despatch ed last November, racking up a freight bill of $1.37 million. The bins in which they were packed cost an extra $320,000, while there was also the $557,147 which the Tonga Development Bank had adv anced in order to produce the large crop. Operational costs and commissions completed the cost side of the ledger.

The Tonga Development Bank had to step in and advance money for the freight because the growers did have the cash to pay for that. The total amount left for distribution to growers was a mere $116,000 not nearly enough to cover their own costs, and to provide a return for all the effort. Some were left in debt as a result of participating in the great 1989 squash export effort.

Nevertheless, there is still apparently considerable optimism that the trade can be made to pay, and the entry of the new joint venture company indicates a commercial confidence that there is a fu ture. The 1989 season has punctured the hopes of those growers who believed that it was a way to make a quick for tune, and reports indicate that there has been some failures in the organisation of packing and exporting of the squash, re ports which speak of confusion at the wharf when growers could not find bins in which to pack their crop, and uncer

tainty about whose produce was actually

aboard each shipment. □