RESTRICTEDWORLD TRADE
ORGANIZATIONG/STR/Q1/FJI/2
14 June 1999
(99-2391)
Working Party on
State Trading EnterprisesOriginal:  English
STATE TRADING
Replies to Questions posed by the UNITED STATES1
concerning the New and Full Article XVII Notification of FIJI2
The following communication, dated 24 May 1999, has been received from the Permanent
Representation of Fiji.
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A matter that should be corrected is the classification of the Fiji Sugar Corporation (FSC) as a
state trading enterprise.  I should advise you that FSC is a private company that is listed on the Suva
Stock Exchange in Fiji.  Among its shareholders are the Fiji Government, statutory bodies, localprivate companies, and private individuals both in Fi ji and overseas.  I enclose a copy of part of the
FSC Annual Report for 1998 which sets out in deta il information on the company requested by the
United States.
                                                     
1 G/STR/Q1/FJI/1
2 G/STR/N/4/FJIG/STR/Q1/FJI/2
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The Fiji Sugar Corporation Limited
Production
The four mills crushed 3,279,639 tonnes cane from an area of 73,313 hectares.  This is
equivalent to 44.7 tonnes of cane per hectare and is a decline of about 24 per cent compared to the
yield per hectare of 59.2 tonnes achieved in 1996.  The total crop in 1996 was 4.4 million tonnes from
an area of about 74,000 hectares.
The significant decline in crop in 1997 is attributed mainly to the damage caused to the crop
by cyclones Gavin and June early in the year.
Sugar Manufacture
A total of 347,389 tonnes of sugar was produced in 1997 and is the lowest since 1985.  It is
about 23 per cent lower than the production in 1996.
The tonnes of cane required to produce a tonne of sugar (TCTS ratio) averaged 9.4.  While
this is better than the average of 9.7 in 1996, the decline in sugar production in 1997 is attributed
mainly to:
• Low cane production
• Disruptions to crushing operations due to industrial action by the members of the Fiji
Sugar & General Workers Union
• Extremely high levels of burnt cane during the season
A record 61 per cent of the cane crop was burnt in 1997 as compared to 43 per cent in 1996
and the previous high of 49 per cent in 1991.
While burning had started from early in the season, it accelerated after the general workers'
strike in July 1997.
Serious processing problems were encountered with the high levels of stale burnt cane.  It
affected the efficiency of the juice heating vessels, which had to be cleaned frequently.  As a result,
there was a marked reduction in the crushing capacity of the mills.  The higher impurity loading alsoretarded sugar crystallization rates and depressed sugar recoveries considerably.  Hence, large
quantities of chemicals had to be used to aid in processing the refractory material.
Sugar quality parameters were generally within acceptable range for the first half of the
season.  However, high levels of dextran, starch, fine grains and colour became a problem during the
later part of the season when very refractory material from delayed burnt cane was being processed.
Key operating data for the 1997 season
Particulars Cane
crushed
(tonnes)Sugar
made
(tonnes)Molasses
made
(tonnes)TCTS
ratioAverage
sugarmade
(tonnes/
week)Average
cane
crushed
(tonnes/
week)Average
crushing
rate
(tonnes/
hour)Season
length
(weeks)
Lautoka 1,160,511 122,296 51,072 9.5 3,730 35,380 332 32.8
Rarawai 907,804 98,006 34,148 9.3 3,510 32,540 290 27.9
Labasa 909,545 95,381 42,224 9.5 3,270 31,150 269 29.2
Penang 301,779 31,706 11,115 9.5 1,170 11,180 93 27.0
Total 3,279,639 347,389 138,559 9.4 11,680 110,250 984 29.7G/STR/Q1/FJI/2
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Maintenance work in the 1997/98 slack season is focussed on the problems that arose in the
1997 crush.  Most of the problems with the new installations, particularly at Labasa and Lautoka
mills, have been rectified and we expect these mills to perform well in 1998.
For some of the maintenance work, like the boiler rehabilitation at the three bigger mills, the
Corporation once again engaged consultants to assist our engineering personnel in the overhaul
programme.
In addition, the Corporation has also decided to hire expatriate engineers for key positions at
the three bigger mills.  It is expected that th e appointment of these engineers would assist in
improving factory maintenance and crushing operations.
Molasses Production
A total of 138,559 tonnes of molasses was produced during the season.  this is equivalent to
about 4.2 tonnes of molasses per 100 tonnes of cane cr ushed and is similar to what was recorded in
1996.  This level of molasses production is high and is primarily related to the extremely refractory
nature of cane processed in 1997.
Environmental Protection
The Corporation has continued to improve its environmental protection controls over the year.
The relocation of the effluent outfall further into the sea at Lautoka ensures increased dilution of the
effluent and minimal effect on the marine life.  Reclamation work and control systems inside the
factories have also lowered the loading of the treatment ponds which performed satisfactorily during
the season.  The Corporation will continue to closely monitor discharge and treatment of effluents toensure its effect on the environment is minimal.
Sugar Exports and Marketing
Export sugar manufactured in the 1997 season  was sold to the following countries:
Destination Tonnage
United Kingdom 145,710
Portugal 33,900
Malaysia 60,000
United States 18,900
Japan 45,000
TOTAL 303,510
African Caribbean & Pacific (ACP) and European Union (EU)
The guaranteed prices of sugar offered by the Commission (EU) to the ACP in October 1997
for the 1997/98 delivery period remained at the same level as in the previous year and were as
follows:
Raw Sugar : ECU 52.37/100 kg.
White Sugar : ECU 64.65/100 kg.
Whilst accepting the offer, the ACP Ministers at the council meeting in Libreville in
November 1997, highlighted the negative effect of the continued price freeze on the earnings from the
Sugar Protocol and also stressed the impact of the significant exchange loss in the conversion of theG/STR/Q1/FJI/2
Page 4
ECU to pound sterling arising from the continued strengthening of the pound sterling against the other
major European currencies.
Following the release of the Commission's Green Paper on ACP-EU Future Relations in
November 1996, a series of consultations on this subject in various regions of the ACP wereundertaken by the Commission Services.
The Fiji Industry was invited by the Commission to participate in these consultations, both at
the regional level held in Fiji, and at an all-ACP level in Brussels in September 1997.  The Brussels
Conference marked the end of the consultation process initiated by the Commission in
November 1996 on the basis of its Green Paper.
It is pleasing to note that based on the subm issions made by the Industry and various other
groups, the Commission in its draft negotiating mandate on the future cooperation arrangement states
that the Sugar Protocol, which enjoys a special status, will be maintained beyond the five-year period.
The SPS quota for the 1997/98 delivery period made available to the ACP and India was
fixed at 300,000 mtwse (metric tonne white sugar equivalent).  Fiji's initial SPS allocation was
25,953.1 tonnes.  In October 1997 Fiji's SPS quota was increased to 29,026.5 tonnes as a result of a
reallocation of shortfall from one of the ACP suppliers.  However, during the year we delivered only
27,456.2 tonnes to Portugal in two separate consignments and declared our inability to deliver the
balance of our SPS quota of 1,570.3 tonnes.  This quantity was reallocated to other ACP suppliers.
In May 1997, Fiji and the other ACP sugar suppliers to Tate & Lyle Sugars successfully
concluded the re-negotiation of their five year rolling commercial contract which resulted in
improvements to the commercial contract terms.
The new commercial contract terms require Tate & Lyle Sugars to improve the discharge
facilities at the Thames Refinery by ensuring a maximum draft of 10 metres at the sugar berth so as to
accommodate sugar vessels in excess of 20,000 tonnes.  The discharge rates and the demurrage rates
were increased so as to encourage the ACP to charter bulk carrier vessels in excess of 20,000 tonnes
capacity.
This new five-year rolling commercial contract will come into effect on 1 July 1998.
World Market
Raw sugar prices throughout most of 1997 maintained a broad upward trend that confirmed a
long run rise in baseline support for the market.  As the year progressed there was increasing concernabout the potential harmful effects on crops in many parts of the world from what appeared to be the
build up of a major El Niño event.  Also, swings in the Indian supply continued to distort
supply/demand signals and skew the reaction of the market to the real situation.
The second half of the year saw the emergence of a major Far East financial crisis with its
potential to impact demand while at the same time an increasing over-supply of white sugar was
building up.  However, although white sugar prices came under pressure from September onwards,
the strength in the raw sugar market was maintained until November/December.
During the second quarter, weather problems started to appear and were to remain
increasingly important market factors for the rest of the year.  In the event, a few crops were to suffer
quite badly but the global impact did not bear out the worst of the predictions that circulated for much
of the year.  Also during the second quarter of the year the crop in Thailand fell behind earlierG/STR/Q1/FJI/2
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expectations.  Production in Cuba also proved to be disappointing compared with the optimistic hopes
that were circulating at the beginning of the year.
By September, however, there had been a whol e succession of optimum weather conditions in
Europe stretching back to early first sowings and, in the West at least, it was becoming clear that anexceptionally good crop was in the making.
Throughout the second half of 1997 one economy after another in the Far East saw their
currencies collapse in value, assets and land values decline, and interest rates soar.  These swings
from their previous "tiger" status were so massive th at few could predict when or at what level these
economies would stabilise.  There has been a traumatic drop in per capita disposable incomes, and
demand patterns for all goods and services will inevitably be affected.  It is more difficult to predict,however, where sugar consumption will fit into th e new order.  To some extent the sugar market
deferred consideration of these huge uncertainties until after the New Year, although the first signs of
a major downward readjustment were already begi nning to emerge by the turn of the year.
Molasses Sales
A total of 120,240 tonnes of 1997 season molasses was exported during the financial year.
Except for 17 metric tonnes exported to Pacific island nations, the balance of the molasses was sold
under contract to United Molasses of the United Kingdom on a fixed price basis.
About 11,461 metric tonnes of the 1997 season molasses remained in storage at the year end
and will be exported together with 1998 crop molasses.
Listing requirements of the Suva Stock Exchange (not included elsewhere in this Annual
Report)
1. As at 6 November 1998, Directors' interests in the share capital of the Corporation of the
Corporation or related companies were as follows:   Mr. Dominiko Mikaele Valaibulu – 480 shares in
FSC Ltd.
2. Directors' Interest In Contracts
During the financial year, none of the Directors had any material interest in any contract with
the Corporation.
3. Directors' Termination Benefits
There are no termination benefits payable to Directors in respect of their tenure as Directors.G/STR/Q1/FJI/2
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4. Statement of Shareholders
Distribution of Shareholding
Holding No. of Holders No. of Shares % Holding
Less than 500 shares 1476 312,490 0.7
501 to 5,000 shares 530 699,802 1.6
5,001 to 10,000 shares 20 136,840 0.3
10,001 to 20,000
shares13 166,920 0.4
20,001 to 30,000
shares1 24,000 0.1
30,001 to 40,000
sharesNil Nil Nil
40,001 to 50,000
shares1 40,800 0.1
50,001 to 100,000
shares2 165,000 0.4
100,001 to 1,000,000
shares2 630,725 1.4
Over 1,000,000 shares 3 42,223,421 95.0
5. Twenty Largest Shareholders
As at 6 November 1998 the twenty largest shareholders held 43,240,786 shares which is equal
to 97.39 per cent of the total issued capital of 44,399,998 fully paid shares of 50 cents each.
1. The Government of Fiji
C/o- Ministry of Finance
Government Buildings
Suva30,239,160 2. Fiji National Provident
Fund
Private Mail Bag
Rajwaqa
Suva7,752,161
3. Fijian Holdings Ltd
PO Box 2110
Government Buildings
Suva4,232,100 4. Unit Trust of Fiji
(Trustee) Co Ltd
PO Box 1359
Suva414,725
5. Colonial Mutual Life
Assurance Society Ltd
PO Box 155
Suva240,000 6. Robert Lee
C/ - GPO Box 13510
Suva98,720
7. Sugar Cane Growers
Council
PO Box 12300
Suva66,280 8. Morris Hedstrom Ltd
Scholarship Fund
Trustees
PO Box 299
Suva40,800
9. Pacific Transport Ltd
PO Box 1266
Suva18,000 10. Lionel Ding Sun Yee
GPO Box 13600
Suva17,160G/STR/Q1/FJI/2
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11. Amraiya Naidu
GPO Box 13153
Suva14,800 12. Rotuma Development
Fund
Rotuma Council
ChambersRotuma14,400
13. Saimone Lutu
PO Box 170
Levuka12,120 14. Doris Leys
C/o Munro Leys & Co
GPO Box 149
Suva12,000
15. FTUC Investments Co-
operative Association
PO Box 1418
Suva12,000 16. Johnson Fong
5/113 Mount Street
Coogee, NSW 2034
Australia12,000
17. Reddy Enterprises Ltd
PO Box 784
Lautoka12,000 18. Joyce Due & Rasmus
Due
93 Mallawa Avenue
Palm Beach, QLD 4221
Australia11,320
19. Sugar Milling Staff
Officers Association
C/o MM Ali, the FSC Ltd
Training Centre,
Lautoka10,800 20. Heihachiro & Masako
Ohamoto
8-4-14-403
Akasaka
Minato-ku, Tokyo
Japan 10710,240
6. Voting Rights of Shareholders
Article 65 provides for:
On show of hands – 1 vote
On a poll – 1 vote for each share held
7. Major Shareholders
The name, addresses and number of shares held by shareholders holding 10 per cent or more
of the issued capital:
1. The Government of Fiji
C/o Ministry of Finance
Government Buildings
Suva30,239,160 2. Fiji National Provident
Fund
Private Mail Bag
Raiwaqa
Suva7,752,161G/STR/Q1/FJI/2
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8. Situation of the Share Register
The share register of the Fiji Sugar Corporation Limited is situated at the Fifth Floor of
Dominion House in Suva.
Financial Statistics
For the year
ended31 March1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
Turnover
($m)239.1 279.3 313.1 292.7 255.8 270.6 253.7 252.0 287.3 235.7
Profit Before
Taxation ($m)(11.1) (2.0) 13.0 18.1 9.3 16.3 9.4 11.6 29.7 15.3
Income Tax
Expense ($m)(4.1) (0.8) 4.4 6.2 3.2 4.1 3.3 4.1 10.1 5.3
Profit after
Tax &Extraorditems ($m)(3.0) (1.2) 8.7 11.9 6.1 12.2 7.2 7.4 19.6 10.6
Total Assets
($m)228.9 235.0 270.6 257.5 251.5 233.6 219.8 203.8 214.8 178.1
Net Assets
($m)113.5 118.0 120.9 115.6 107.0 104.2 95.4 91.5 87.4 71.2
Proceeds of
Sugar &Molasses($m)232.2 275.3 310.1 288.8 255.8 273.4 243.5 234.0 268.7 199.8
FSC's Share
of Proceeds
($m)69.3 79.1 89.0 81.6 73.7 79.2 71.3 68.2 77.0 59.5
Price per
Tonne Cane($)50.07 44.82 53.78 50.98 49.16 54.99 50.89 41.30 46.48 44.16G/STR/Q1/FJI/2
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Production Statistics
Season 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Cane Crushed
(000t)3,280 4,380 4,110 4,064 3,704 3,533 3,380 4,016 4,099 3,185
Sugar
Produced(000t)347 454 454 517 442 426 389 408 461 363
Molasses
Prod. (000t)139 186 181 155 136 129 138 164 151 130
Tonnes
Cane/TonneSugar9.44 9.65 9.04 7.87 8.38 8.28 8.69 9.84 8.90 8.78
Molasses %
Cane4.2 4.2 4.4 3.8 3.7 3.7 4.1 4.1 3.7 4.1
POCS % 11.90 11.15 11.88 13.29 12.60 12.56 12.23 10.92 11.67 11.78
Cane Purity % 83.1 82.4 82.8 85.0 84.3 83.9 83.0 81.4 83.2 82.4
Fibre in Cane
%12.62 12.18 12.24 12.83 12.64 12.31 12.66 12.19 12.21 11.95
Average
Crushing Rate
for all mills(tcph)984 1,044 1,071 1,057 1,039 1,042 1,044 1,018 1,025 972
Actual
crushing Timeas % ofAvailable
Time70.7 83.0 80.6 89.0 80.7 88.7 83.0 79.5 86.4 86.9
Field Statistics
Season 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Number of
Growers22,100 22,304 22,449 23,264 23,454 23,334 22,479 21,33
421,771 22,12
7
Tonnes Caneper Hectare44.7 59.2 55.6 54.6 50.1 48.6 46.6 57.6 58.1 49.9
Average
Tonnes Caneper Grower148 196 183 178 163 168 161 194 194 154
Number of
Cane Cutters14,891 15,118 14,305 13,797 12,635 11,881 12,755 12,35
411,360 11,14
4
Output per
Cutter (tonnes)220 290 287 295 293 297 265 325 361 286
Burnt Cane % 61.6 43.4 47.0 40.2 33.4 31.5 49.0 39.3 22.8 15.5G/STR/Q1/FJI/2
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Sugar Exports – Destinations and Quantities (Metric Tonnes)
Season UK/EU Malaysia USA Japan Korea Canada Singapore China NZ SPS Total
1988 170,785 51,954 11,700 31,500 - - - 27,604 37,000 - 330,543
1989 194,809 108,046 15,215 47,250 14,000 - - - 37,070 - 416,390
1990 157,139 110,000 18,900 47,500 - - - 14,770 19,000 - 367,309
1991 183,229 87,975 14,585 44,668 - - - 25,230 - - 355,687
1992 198,929 117,239 15,750 31,500 - 14,000 - 15,000 - - 392,418
1993 183,204 106,886 8,453 46,500 20,422 38,000 - - - - 403,465
1994 169,043 113,367 11,00 143,080 - 36,000 - - - - 472,690
1995 192,950 90,000 10,200 31,500 - 18,000 - 15,750 - 55,400 413,800
1996 137,554 90,000 20,000 77,250 15, 000 - 20,000 20,000 - 30,150 409,954
1997 145,710 60,000 18,900 45,000 - - - - - 33,900 303,510
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