Ramu, our sugar factory, has stopped making sugar.
News
Thursday 14th April, 2011
Ramu’s bitter dose
BY OSEAH PHILEMON
and SIMON ERORO
SUGAR consumers throughout Papua New Guinea stand to pay over 70 percent more for sweetness when imported sugar from Thailand arrives on the shelves of their supermarkets and trade stores within the next week.
The reason for this is failure by the Government to grant tariff relief to enable Ramu Agri Industries Limited (RAIL) to import sugar from Thailand under a relief arrangement until sugar production can resume at the Gusap factory.
RAIL general manager Jamie Graham told the Post-Courier in Lae yesterday that the company had asked the Government through Treasurer Peter O’Neill as far back as November last year for the tariff to be reduced from 70 percent to 40 percent.
The minister told this newspaper last week (see clipping) that he had given approval for a one-off partial reduction of tariff for Ramu to import sugar.
This had apparently not been followed through by government instrumentalities to have it gazetted in order for Customs to apply the lesser duty.
RAIL’s sugar production was affected by severe dry spell last year and vandals set fire to 700 hectares of the productive cane fields. When the company became aware that production was projected to drop by 7% and demand up by 15%, it made a submission to Mr O’Neill for the tariff reduction to ensure sugar consumers were not hard-hit with high prices of the sweet import.
Mr Graham said the government assured the company this would be done by January 2011but it reneged on the undertaking.
Mr Graham said late last week he was assured by the National Executive Council Secretary and the Treasury Department that Cabinet would make a decision on the matter this Monday but Cabinet did not meet as planned.
He said Thailand sugar arrived at the Lae port last week and was awaiting clearance. Yesterday morning Ramu instructed their customs agents to pay the 70 per cent tariff on the imported sugar and get it off the wharf. Ramu also had to pay for 10 days of storage and wharfage fees while awaiting clearance.
Mr Graham said the company could not let the sugar sit at the wharf while waiting for the NEC decision on tariff reduction as the costs of storage would increase significantly. He said the company imported 2000 tonnes of sugar from Thailand with another 2000 tonnes to arrive within a month’s time.
Any NEC decision now on the reduction in tariff will be “too late” and consumers will just have to wear the huge increase in the price of sugar once it arrives at the shops. “We have no choice but to pass on the increase to the consumers,” Mr Graham said.
The imported sugar was yesterday being transported to the Gusap factory where it will be tested to ensure it meets Ramu Sugar standards before being packed into the various packaging sizes and transported to wholesalers and shops to meet the outstanding orders.
Mr Graham said the actual price of the sugar on the shelf will not be determined until all the costs have been added up. For every K1000 worth of sugar, Ramu pays the government K700 (70 per cent) and this is why the price will shoot up sharply until the local sugar production returns to normal. Other costs to be factored into the price formula include wharfage, freight and repackaging.
Ramu had planned to import up to 8000 tonnes of sugar to meet the domestic PNG market in the interim. But good news is on the way.
Mr Graham said on Tuesday this week the boiler at the sugar mill was started up which is the first sign that sugar canes are about to be brought into the mill for processing.
