Reduced import duty not sweet for sugar firm

Business, Normal

The National, Friday 24th August 2012

THE government has dealt a further blow to New Britain Palm Oil Ltd (NBPOL) by reducing sugar import tariff protection to the point where the future production of sugar in Papua New Guinea is put in jeopardy.
The government has reduced import tariffs on sugar from 70% to 35% in addition to the world price of sugar falling by some 30%, virtually opening the door to overseas imports.
Chief executive officer, Nick Thompson, revealed this yesterday as NBPOL announced its half-year trading results to the Port Moresby and London Stock Exchanges, showing a dramatic fall in profitability.
He said the sugar import tariff protection was in addition to the rising costs and the lowering competitiveness of Papua New Guinea’s agricultural export sector.
Thompson said the company was very concerned at the rising value of the kina, which had dramatically increased production costs and caused the agricultural exporters in PNG to suffer.
“Papua New Guinea has some really important decisions to make as to whether it wants a vibrant agricultural sector or whether it is going to simply pander to the oil gas and mineral sector,” he said.
“We have heard from successive governments of how agriculture is an important pillar of the economy.
“It is the sector that impacts on far more families than does any other industry in PNG.”
“Equally, we have seen very little in terms of support in terms of getting better rural infrastructure or fiscal recognition of the damaging inflationary impacts the LNG project has so far had on existing industry.
“If the government fails to act quickly there will be far greater impacts in our rural communities than any oil and gas revenues can compensate for.”
NBPOL is PNG’s largest agro-business enterprise and is involved in sugar, ethanol, palm oil, and cattle production in the Ramu Valley of Madang and Markham Valley of Morobe.  .