The Fiji Sugar Corporation Ltd took over the operations of the Fiji Sugar Marketing Limited from 1 April 2009. The Fiji Sugar Marketing Company Limited (FSM) was established by the Government in 1976 for the purpose of marketing sugar and molasses and entered into an agreement with Fiji Sugar Corporation (FSC) as the marketing arm of FSC. The relationship between FSM and FSC was established within the “agent-principal” legal framework whereby the authority and responsibilities of the two parties are stipulated by the agreement. Ever since the functions of FSM have been driven by the global and domestic changes taking place in the sugar industry.

In the period between 1951 and 1973, the sugar industry was driven by the Commonwealth Sugar Agreement (CSA), a preferential agreement between the United Kingdom (UK) and the Commonwealth countries by which the UK guaranteed to purchase specified quantities of sugar for a negotiated price which was higher than the market prices. Subsequently the Sugar Protocol (SP) replaced the CSA. The SP agreed between the European Community (EC) and the African Caribbean and Pacific (ACP) countries came into force in 1975 whereby EC agreed to import at guaranteed prices, specific quantities of cane sugar (raw or white) which originate in the ACP states.

The Protocol granted to a group of ACP sugar producers a preferential quota of 1.294 million tonnes of white sugar. The proportion of the preferential quota had been a significant part of the total sugar exports as well as Fiji’s total sugar production and the total sugar revenue. However, due to various initiatives taken by EU and its undertaking to World Trade Organisation (WTO), the price in the preferential sugar markets are currently declining and eventually may not make economic sense to export to the EU market if the preferential prices are no longer attractive.

Therefore the Fiji sugar industry, for which the EU is the major market, is at the risk of loosing its preferential prices over the long term. However, it is to be noted that the European Commission has maintained that the EU price even after 36% reduction will remain twice as high as the world market price.

The role of Marketing has become critical with the challenges prevailing in the major markets. Whilst there are significant changes taking place at industry level, to cope with these challenges, the marketing function should ensure that appropriate strategies are in place to defend and expand existing markets or to penetrate into new markets. However, in addition to global developments in the sugar sector, Marketing Department's operations are strongly influenced by industry factors and initiatives taken by FSC.

The Marketing Department is responsible for marketing brown sugar. There are three forms of brown sugar produced by FSC – JA and Brand 1 and bagged Direct Consumption raw sugar. JA is manufactured for the Japanese Market (with a polarisation limit of 98) and Brand 1 is for the rest of the refining customers (with a minimum polarisation of 98.3). Direct Consumption raw sugar has a minimum polarisation of 98.8. Sugar is exported in bulk or as bagged (50kg and 25kg).

The former is exported from Lautoka / Labasa terminals while the latter is exported from Lautoka only. Sugar is exported to four main destinations – Europe, United States of America, Japan (World market) and Pacific region which includes New Zealand and other Pacific Islands eg Solomon Islands, Kiribati, Tonga, Samoa, etc.