Fiji : Fonterra milk fills Fijian gap
Fiji?s Rewa Dairy Cooperative Dairy is buying milk from New Zealand to meet demand.
Rewa Life milk, a popular product with consumers, is being produced and packaged in New Zealand.
Fonterra confirmed to the Dairy Exporter that it supplies Rewa, but would give no details of the arrangement.
According to Fijian news media reports, Rewa is importing around 70 million litres of milk annually.
The cooperative is Fiji?s only dairy processor and manufacturer.
Rewa Dairy chief executive Ratu Savenaca Seniloli told Fiji Television his company is being challenged to consistently supply the local market at an affordable price and the local industry can?t provide enough milk.
To manage a smooth supply chain, the company had to enter an arrangement with New Zealand suppliers, he said.
Savenaca said the imported milk is costing around F$400,000 (NZ$372,000) a month, money which he tells farmers and shareholders should be going to them.
The limited fresh milk supply from the local farmers is a major constraint, he said.
The country?s land-lease system is a big impediment to increased production.
Much of Fiji?s leased dairy land has more than one owner, and farmers must negotiate with each to renew and maintain the land area.
In January this year, six major farms stopped production after their leases were not renewed by landowners.
Tailevu Provincial Council chairman Josefa Serulagilagi warned then that, unless the lease problem was addressed, other dairy farms would close and the industry would face greater difficulties.
Other factors in reducing production are weak dairy farm management and younger generations preferring urban life, in Fiji and overseas, to dairy farming.
Rewa Dairy last month announced an operating profit of F$355,293 for the financial year ending December 2007, down from $464,826 in 2006.
Total profit after tax was F$1,006,460 after an income tax credit of $651,167.
Savenaca said increasing food prices contributed to the decline in profits.
?We increased our volumes but the cost of buying raw materials went up and we were not able to recover to the price of the product we were manufacturing and selling,? he said.
For importers in the global trade of dairy commodities, 2007 had been a time of unprecedented increases in commodity prices while, for exporters, returns had been excellent.
?Unfortunately for Rewa Co-operative Dairy Company and Fiji?s dairy industry, these developments had an adverse effect as more than 85 percent of what is consumed domestically is imported,? Savenaca said in the annual report.
Serulagilagi called for the Fiji Government to introduce more measures to boost the industry, so the country was not at the mercy of overseas suppliers.
He said food experts and economists were forecasting demand to grow by 2.7 percent/year or 147 million tonnes liquid milk equivalent of new consumption.
Fiji?s Daily Post said local dairy herds produce around 11 million litres a year, but the demand requires imports of 63 million litres.
Rewa is not the only importer.
Fiji had 285 registered dairy farms in Fiji last year, 226 of them supplying milk to Rewa.
The country?s 9500 or so milking cows produce an average of 7 litres of milk/cow/day.
The Government says it is taking steps to improve genetics, improving nutrition such as pasture and fodder, researching local feed ingredients as a source of supplementary feeds, improving marketing and infrastructure such as construction of farm dairies and milk collection centres to give an incentive to farmers.
Its assistance is focused on smallholder dairies. D
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