The Executive Director,
Ladies and Gentlemen.
Bula vinaka and a very good morning to you all.
Precisely a year ago today, I addressed you all here in London and began by expressing our condolences and solidarity with the people of France for the terrorist atrocities in Paris. The terrorist threat to our collective way of life continues. And today, I want to begin by expressing our condolences and solidarity with the people of Turkey, who have endured a series of bomb blasts in recent months that have also claimed many lives.
I was unable to attend the 49th Council session in Istanbul in May because of a pressing domestic engagement. But I want to thank Dr Husnu Tekin for hosting that session successfully and ask him to pass on our very best wishes to the Government and people of Turkey as they confront the continuing threat.
Mr Chairman, Fiji has endured its own period of sorrow and suffering in 2016 after the biggest tropical cyclone to make landfall in the southern hemisphere slammed into our islands in February. We are still dealing with the effects of Tropical Cyclone Winston, that killed 44 of our loved ones; damaged or destroyed many thousands of homes; And left us with a total damage bill of 1.4 billion US dollars or the equivalent of one third of our GDP.
Many of the 200,000 Fijians who are dependent on the sugar cane industry for their livelihoods were among those who endured winds of more than 300 kilometers an hour. And they did so with a display of fortitude and resilience that inspired their fellow Fijians and much of the rest of the world.
While a significant proportion of our industry was affected – and I will go into the details shortly – Fiji was relatively fortunate in that Winston spared our main tourism areas and our principal source of national revenue.
In spite of the devastating impact on those areas directly in the path of the cyclone, our economy as a whole remained relatively buoyant and we are still expecting it to grow by up to three per cent this year. However, we are acutely conscious as a nation that we must prepare for a terrifying new era in which extreme weather events like Winston become more frequent because of climate change.
Were a cyclone of a similar strength or greater to score a direct hit on Fiji, then our entire economy would be devastated, our development set back for decades, and we would have little or no chance of meeting the 2030 Sustainable Development Goals that are at the core of the global agenda.
In common with other Small Island Developing States and other vulnerable areas of the world, Fiji must persuade the global community to embrace a more radical plan of action to reduce the carbon emissions that are causing this crisis. And we must gain urgent access to the finance we need – in the form of grants – to build our adaptation and resilience to these extreme weather events. The storms and droughts plus the rising sea levels that are the other grave impact of climate change.
Mr Chairman, Fiji is taking a lead in this struggle on behalf of our Pacific neighbours and other low lying areas of the world. Exactly two weeks ago in Marrakesh, Morroco, I was honoured to be chosen as the incoming President of COP-23. And Fiji will lead the next UN Conference on climate change, when the nations of the world gather in Bonn towards the end of 2017 to discuss the collective challenge we face.
Today, I give you all – my friends and colleagues in the sugar industry around the world – the same pledge I gave when I accepted the COP presidency in Marrakesh. That Fiji will do everything in its power to draw global attention to the urgent need for more decisive action by the industrial nations on climate change, especially on the part of the United States.
We cannot have the second biggest carbon emitter in the world withdraw from the Paris Agreement – as President-Elect Trump has signaled – or it will surely fail. I am pleased to see that in a recent interview, Mr Trump appears to have modified his hardline stance that man-made global warming is a hoax. But I appeal to him to accept the overwhelming scientific consensus that man-made climate change is real. And to lead our collective struggle. Because time is running out and the world as a whole must act. Not only to implement the Paris Agreement but go one step further and embrace even deeper cuts in emissions if we are to avoid catastrophe.
Mr Chairman, by Fiji assuming the presidency of COP-23, the Fijian people – including those in the sugar cane industry – now have a more powerful voice to put our case. My job as COP President is to work as hard as I can to get the world to listen to the clear call for action that we are sending from our island homes and the sugar cane growing areas of Fiji. My job as their Prime Minister is to work as hard as I can to keep Fijian sugar viable and protect the industry on which their livelihoods depend. So permit me to now give you the customary snap shot of the state of our industry at the end of 2016 and where we are going.
Mr Chairman, Tropical Cyclone Winston was a devastating blow, coming on top of a prolonged drought in sugar cane growing areas since the beginning of 2014. When Winston slammed into Fiji in February, it destroyed the Penang Sugar Mill, leaving only three mills operational this season at Lautoka, Rarawai and Labasa.
Before Winston struck, our crop estimate for the current season was 1.84 million metric tonnes of cane. But that has had to be reviewed downwards three times to the current 1.354 million metric tonnes.
As of October 24 and after 16 weeks of crush, the three remaining mills had crushed a total crop of 1,116,564 metric tonnes of cane, yielding 115,068 metric tonnes of sugar with a TCTS of 9.7.
This represents 82 per cent of the cane crop and 76 per cent of sugar production, on our final revised estimates. The ratio of tonne cane to tonne sugar is above the projected ratio by 0.7 percentage points, from 9.0 to 9.7. This is a direct result of the devastation wrought on our cane crop by Tropical Cyclone Winston.
The remaining 18 per cent of the crop – 237,436 metric tonnes – is currently being harvested during the remaining six weeks of the crush. And on the basis on the current TCTS of 9.7, we expect the remaining crop to yield only about 24,480 metric tonnes of sugar.
We predict that we will achieve the final revised crop estimate of 1,353,000 metric tonnes. But with a TCTS of 9.7, we are unlikely to achieve the final revised sugar production of 150,444 metric tonnes. The sugar make is more likely to be around 139,546 metric tonnes.
So Mr Chairman, it has not been a golden year for Fijian sugar thanks to Winston. We have taken a hit as an industry in terms of our production, just as many of our sugar cane farmers and their families have taken a hit with the destruction of homes and infrastructure. But I can assure them and all those who depend on sugar for a livelihood in Fiji that we getting back on our feet and are determined to secure the future of the industry. Winston has been a setback, but the overall outlook for the sugar cane industry remains positive.
In our recovery and rehabilitation efforts after Winston, we have been blessed by the support of our friends – our development partners, aid donors and ordinary people the world over who came to our assistance and are helping us rebuild. To them we again say a heartfelt vinaka vakalevu. Thank you.
I especially want to acknowledge the generosity of the European Union and its member states in assisting our agriculture sector, including sugar. The EU has provided Fiji – through direct budget support – the sum of ten million Euros for rehabilitation and recovery. And for that for a truly grateful.
I will be travelling to Brussels from here for meetings next week with European officials – including the President of the European Council, Donald Tusk. As you all know, our preferential access to the European market for sugar draws to a close towards the end of the next year. And we also appreciate the assistance that the European Union is providing to Fiji to make that transition less painful.
Mr Chairman, as I have said before, we do not intend to give up on sugar cane in Fiji. On the contrary, we intend to continue with our program to modernise the industry, to embrace new technology to improve our yields and give us the information we need to make better planning decisions.
We must extract as much sugar as we can from a single plant and value add with new products and by-products. We must build our resilience to the threat to the industry posed by climate change. And we must constantly scan the horizon for new markets and work as hard as we can as an industry to give those markets what they require.
Mr Chairman, with this in mind, the Fijian industry is undertaking a review of its Sugar Action Plan 2013-2017 to identify what is working and what is not. To find out why certain targets haven’t been met and what needs to be done to meet them. And set new targets and time lines, plus new policy guidelines and investment plans, to take us forward. All this will be included in a new successor plan for the industry for the next three to five years starting next year – 2017.
Mr Chairman, innovative change requires innovative leadership. And to lead the Fijian sugar cane industry forward with new ideas and a new direction, we have brought about changes at the executive level of the Fiji Sugar Corporation, that owns and operates our four mills.
First and foremost, we have appointed a former banker with a global reputation, Mr Vishnu Mohan, to lead the FSC Board of Directors as Chairman. As well as a distinguished banking career that included heading the ANZ Banking Group in the Pacific, Mr Mohan also has considerable experience in commodity trading, especially in Africa. And he brings to the FSC a global perspective and an impeccable record of strategic management and planning across a broad front.
We are also recruiting a new CEO to preside over the day-to-day operations of the Corporation, who will have a specific brief to work more closely with our sugar cane farmers and other stakeholders to improve the performance of the industry as a whole.
Our aim is to reduce the cost of production, maximize revenue and ensure that the industry remains viable and sustainable. Because that is our ultimate duty to the Fijian people and especially those who rely on sugar. That we provide the industry with the right leadership and all work as a team – one people, one industry – as we move forward together in challenging times.
Mr Chairman, I want to close by thanking all those Fijians in the sugar cane industry who in spite of the crippling blow of Winston, kept working and kept our industry going. It was very humbling for me as Prime Minister and Minister for Sugar to go out into sugar cane growing areas and meet our people face to face. Their resilience, their determination in the face of adversity was truly inspiring. And I am certain that as we tap that spirit of our people moving forward, and stay focused and united, the future for Fijian sugar is assured.
Vinaka vakalevu. Thank you.