SUVA, (FIJI TIMES) – Fiji will continue to export sugar to the UK and EU despite Britain leaving the EU, which could have implications on the sugar market generally.
Reserve Bank of Fiji governor Barry Whiteside said the central bank’s stand was that “our sugar will not be affected by United Kingdom’s unprecedented decision via a referendum on June 23 to leave the European Union (Brexit)”.
Whiteside assured that it might not affect Fiji now, but its impact in the future was still yet to be forecast.
The UK comprises England, Scotland, Wales and Northern Ireland, and the traditional British sugar buyers, Tate & Lyle Sugars, is the most lucrative market for Fiji sugar.
Fiji is a member of the African, Caribbean and Pacific (ACP) group of countries.
ACP countries have preferential access to the European market, but this is expected to come to an end next year.
“We all know the sugar in the EU market, we will lose that in 2017. It’ll happen,” Whiteside said.
“We will still maintain our exports to the UK and EU,” he said.
National Federation Party and Opposition spokesman on finance, Professor Biman Prasad said earlier it would be interesting to see how this would affect sugar sales to Britain.
“Britain, a key member, not being part of the European Union, will obviously have implications,” he said.
Prof Prasad said this would also have implications on Tate & Lyle Sugars, which buys sugar from Fiji and other ACP countries.
However, he said, the full impact of Brexit could only be realised once the whole process of the exit was completed.
“The referendum is one thing, there is a whole process of member countries exiting the EU and the UK will have to go through it — it could take two years for that to be realised,” he said.
Britain voted to leave the EU in a historic move that saw the leave campaign winning by 52 per cent to 48 per cent, and had more than 17.4 million people voting in the referendum last Thursday to sever ties with the EU.
About 16.1 million chose to remain in the bloc.
S&P Global Ratings said Brexit would affect both the real economy and markets in Asia-Pacific, including Fiji.
In the near term, it said, the real economic impact was likely to be largely neutral, but in the medium term, it may be significant if lower global economic growth depressed the region’s exports and investment activity.
On the other hand, it said, the market impact was likely to be significant in the near term, particularly in terms of stock market and currency volatility.