Business
Ramu Sugar, Cattle Trade Doing Well
New export markets tapped
Papua New Guinea's Ramu Sugar has made a breakthrough. Its research into tropical sugar varieties has turned up a world class.
With sugar cane being native to the country and more at risk to pests and diseases, Ramu Sugar has developed varieties resistant to threats and pests.
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The first commercial production from locally bred varieties occurred in 2001. The planting of Ramu's own varieties increased in 2002.
The average annual rainfall at the estate of over 1900 millimetres is suitable for sugar cane production. A wet growing period from September to May is followed by a dry period ideal for cane harvesting.
Wherever possible, Ramu's sugar cane is cut green in accordance with industry practices to improve the sugar yield, reduce cost, and improve agricultural sustainability.
Based on a 28-week harvesting season from mid April to October, the mill has the capacity to process in excess of 500,000 tonnes of cane per season.
The main by-product of the sugar mill is molasses. About 12 percent of total output is sold locally, primarily as cattle feed. The balance of around 15,000 tonnes per year is pumped to the distillery adjacent to the sugar mill for conversion into alcohol. In 1995, the distillery was upgraded from producing industrial grade alcohol to producing potable grade alcohol. The bulk of the annual production of over 2 million litres of potable alcohol is exported.
Papua New Guinea currently holds an export quota to the United States for approximately 7000 metric tonnes per annum.
In 2001, Ramu Sugar supplied export markets in Samoa, the Solomon Islands and Kiribati.
However, to provide refined sugar to the Papua New Guinea market, Ramu Sugar imported 700 tonnes of refined white sugar from Australia in 2001.
Sale prices of sugar produced locally are restrained by world prices, exchange rates and the sugar import tariff of 76 percent per year (reducing to 70 percent in 2003).
Meanwhile, Ramu Sugar's cattle farming project is the largest single cattle operation in the country. It constitutes some 25 percent of the national herd.
Ramu Sugar's herd of 17,500 Brahman beef cattle graze on 15,000 hectares of land.
The Ramu Beef operation has undergone a major restructuring in the last two years, resulting in much reduced costs. Indications are that the herd performance is improving.
The restructuring and performance improvement is ongoing. Ramu runs a system of "cell grazing" whereby cattle are moved systematically around fenced areas with the objective of improving the efficiency of grazing, raising stocking rates and weight grain per hectare.
All cattle are turned off (sold internally) to the processing facility at market value.
Cattle turn-off has declined due to decisions by management to rectify earlier unsustainable high turn-off. Improvements are currently being made to the Ramu Beef operation, which will allow turn-off to be increased to 3000 levels per hectare.
The processing plant is able to handle up to 200 cattle per week, which is well in excess of the projected farm turn-off. Numbers processed have remained fairly stable over the last three years, with outside cattle being sourced in addition to stock from Ramu Beef.
More emphasis will be placed on developing a brand image for premium beef, fully produced and processed by Ramu Beef.
Outside cattle will still be sourced but only if markets are available, and if they can be processed.
In Papua New Guinea, the beef cattle farming industry has operated for over 30 years. Cattle numbers reached a peak of 135,000 in 1976, but declined to 75,000 in recent years.
In Port Moresby, the major market for prime beef, the availability of cattle is low and the local abattoir small. Beef is sourced from Lae or is imported. The major retailers in Lae, the second major market, have their own small break up facilities and have cattle slaughtered at the Lae abattoir. Mining companies and other large caterers are difficult to supply from local cattle because of their specific requirements, and usually source meat already processed from overseas.
The total slaughtering capability of Papua New Guinea is substantially in excess of the numbers being turned off each year. Similarly, the total break up facilities available, especially on the New Guinea side of the island, is in excess of both the local market and the supply of livestock. This results in break up for third parties, who do not have their own facilities being competitive as all the small facilities attempt to meet their own needs by supplying this limited market.
As with other major cattle producing countries in the region, Papua New Guinea is now experiencing a major lift in demand due in part to exports of live cattle to near neighbours. This has assisted significantly in improving returns to cattle farmers.
