Westpac says Fiji faces a difficult decision over the long-term future of its sugar industry, warning that continuing to invest heavily in the sector may not be sustainable without major reforms and a gradual transition to alternative livelihoods.
In its Fiji FY2026-27 National Budget Review, Westpac said Fiji’s sugar industry has become increasingly uncompetitive since losing preferential European Union sugar prices.
“Fiji no longer benefits from the preferential prices once offered by the European Union, which at one stage paid nearly three times the prevailing world market price for sugar.”
The report says Fiji now competes with major sugar-producing countries such as India, Brazil and Australia, all of which enjoy significant competitive advantages.
“Today, Fiji must compete against large-scale producers such as India and Brazil, which benefit from lower labour costs, greater economies of scale, larger state subsidies and more advanced technology.”
Westpac noted that Fiji has restructured its sugar industry before, with mills opening and closing over time as economic conditions changed.
“The big question is whether Fiji should keep directing money into sugar or help farmers shift to other livelihoods.”
The report said mechanisation alone has not solved the industry’s challenges, particularly in hilly areas where harvesting remains difficult.
It also warned that mechanically harvested cane contains more “extraneous matter,” reducing sugar yields because Fiji’s ageing mills were designed primarily to process manually harvested cane.
Westpac said small farm sizes, long distances from mills and ports, and continued dependence on manual labour have further undermined the industry’s competitiveness.
Despite these challenges, the bank said the industry could not simply be shut down because thousands of families still depend on it.
“Fiji cannot shut the industry overnight because 10,000 growers depend on it, that is about one percent of the population, or four percent if you count family members.”
Instead, Westpac recommended a gradual, long-term transition.
“Reforms are needed to assist existing farmers and industry participants to gradually transition to alternative income sources.”
While describing mechanisation as essential to improving profitability, the report said achieving that goal would require substantial capital investment that Fiji currently lacks.
“Such transition will require a gradual long-term roadmap.”
