Taiwan Today

The sugar industry is the biggest and most important industry in Taiwan, and wields a preponderant influence on the economy of the island. It employs regularly more than 22,000 men in its mills and on its plantations and railways, and is a big consumer of coal, coke, cement, machine parts, limestone, gunny bags and other materials. It is also a big customer of the railways and shipping services. Each year it spends millions of dollars for construction and maintenance work. Through its own railway system of more than 3,000 kilometers in the central and southern parts of the island, thousands of tons of farm products are shipped from the hinterland to consumption centers and ports. These railways are also the only means of transportation for farmers' children going to their schools located many miles away from their homes. Both economically and socially, therefore, the sugar industry in Taiwan is rendering a great service to the people.

2. Sugar as Source of Foreign Exchange

Sugar is the main source of foreign exchange for Taiwan, as may be seen from the following table:

3. Sugar Production in Taiwan

The southern half of Taiwan is situated in the Torrid Zone. The warm climate and plentiful rainfall are most suitable for sugarcane growth. Early settlers from the Chinese mainland introduced the sugarcane into Taiwan, and sugar was exported from this island as early as 1620. Ever since then it has been considered as an important export commodity. The manufacture of sugar with modern processes, however, started only in 1902 when the Japanese built the first mill in Chiaotzetow near Kaohsiung. Later, more mills were built until the number reached 42. Figures showing the amount of sugar produced and the area of land devoted to the growth of sugarcane during the post-war years ate given in the following table:

4. Taiwan Sugar Corporation

The sugar industry in Taiwan was formerly operated by four corporations under the Japanese. After V-J day they were consolidated and incorporated into the Taiwan Sugar Corporation jointly owned by the Central Government (59%), the Taiwan Provincial Government (37.7%), and private investors (3.3%). It was capitalized at US$120,000,000 and is therefore the biggest single sugar corporation in the world. After closing down six uneconomical mills during the past few years, the Corporation now operates a total of 30 sugar mills with a total grinding capacity of 65,000 metric tons of sugarcane per 24 hours. The railroads operated by the Corporation specifically for transporting sugarcane have a total length of 3,247 kilometers (2,020 miles), excluding siding, of which 2,575 kilometers (1,600 miles) are locomotive lines. The tracks have a 30-inch gauge while the Government's Main Trunk line in Taiwan has a 42-inch gauge. One-third of the lines is open to business and brings an appreciable income to the different mills.

The Corporation makes all grades of sugar from raw to cube sugar. Its plantation white sugar of superior grade (SWC) is most welcome in the Middle Eastern countries owing to its large crystal size. The molasses are partly used as raw material for manufacturing alcohol; the mills have a total capacity of turning out 71,300 US gallons per 24 hours. Other by-products are fusel oil, yeast tablets and wallboards. The different grades of sugar and the by-products are shown in the following table:

5. Cane Farmers and Agricultural Loans

The Corporation holds title to 52,196 hectares (hectare = 2.47 acres) of different grades of land, of which 41,888 hectares are cane farms. Sugarcane is grown on a two-year rotation basis. As this is only enough for 20% of the sugarcane required by the mills, the Corporation depends on the contracted farmers for 80% of its cane supply. However, the average farmer owns only about one hectare of land and he usually uses half of it for planting sugarcane. Furthermore, he has practically no means of livelihood during the 18 months of cane growth, and he cannot obtain a loan from any bank. The Corporation serves as a trust com­pany to secure a loan for him at a low interest and renders the service free of charge. Since there are no less than 200,000 farmers, this service involves quite a large amount of work.

The amount of the loan given to each farmer is based on the number of hectares of land he uses for growing sugarcane and the yield of his land during the past years. The loan includes both cash and fertilizers, and is paid back in the form of sugar when his crop is delivered at the mill and processed into sugar 18 months later. The conversion is made at the beginning of the milling season - that is, when his cane crop is about to be harvested.

During the harvest, the Corporation gives another so-called "harvest loan" to enable him to cut and clean his sugarcane and deliver it to the nearest station of the Corporation's own railway. If his sugarcane, after having been weighed, proves to exceed the average yield per hectare by a certain amount, he also gets an incentive grant in compensation for his labors. In the crop year 1952-53 a total agri­cultural loan of NT$143,000,000 in cash will have been distributed to the farmers by the end of June 1952, for a total contracted farmers' acreage of 88,742 hectares.

6. Application of Fertilizers

Fertilizing materials used for sugarcane consist of nitrogenous fertilizers such as ammonium sulfate, calcium cyanamide, ammonium nitrate and calcium ammonium nitrate; phosphate fertilizer, such as superphosphate and ammo-phos; and potash in the form of potas­sium chloride. But the major portion is nitrogenous. Since V-J day, fertilizers have been used more and more in proportion to their availability on the world market, with the local factories supplying only a relatively small amount. The application per unit area and the total amount are shown in the following table:

7. Increased Yield of Sugar

In the past years, the average yield of sugar per hectare has been only about 6 metric tons. The reasons for such a low yield are many, but the essential ones are lack of irrigation water and shallow plowing of the field for planting. The Corporation has endeavored in many ways to improve the yield, and this is clearly shown in the following table:

To increase the yield still further, the Corporation has acquired a total of 280 tractors of different types in the past years, and they have been increasingly used in conjunction with the old Japanese Heath steam plows.

On the side of irrigation, the Corporation started the deep-well program in 1950, and a total of 117 wells were drilled on the various Corporation-owned farms. These wells vary in depth from a few hundred to one thousand feet, and on the average deliver around 1,000 gallons per minute. Only partially utilized in 1951, they will show their real effectiveness in 1952. It is estimated that each well can irrigate an area of 50 to 100 hectares. When its water is efficiently used, an increase of 20% to 30% in the yield of sugarcane can be expected.

Another effort to obtain an increased yield is the development of a better sugarcane variety. Formerly the varieties used were from Java - POJ2878 and POJ2883. The Japanese-developed variety FI08 was also quite popular. Since V-J day, breeding stations have been seriously at work. One variety, F134, which was bred by the Japanese, has only in late years proved capable of giving an increased yield of at least 30%. Another variety, NCO 310, which was introduced from Natal, South Africa, has also been found to be most adaptable to Taiwan environment and capable of having a yield exceeding that of FI08 by 60% to 100%. These two new varieties will be widely propagated in carrying out the coming planting program, and they are definitely new canes developed by the Corporation after V-J day.

All these efforts will doubtless help to step up the production of sugar in Taiwan.

8. Market and Sales

With the exception of about 60,000 tons of sugar consumed locally, all sugar produced in Taiwan has to be sold abroad. Before the war, the 1,000,000 tons of sugar annually produced in Taiwan could all be sold in Japan and there was no worry about markets. This would still be true if Japan had not placed a limit on her consumption and import of sugar in order to save her foreign exchange. At present, the annual consumption of sugar in Japan is estimated at 600,000 tons of raw sugar.

Other sugar producers in the Far East are the Philippines and Indonesia. The former has a sales quota in the United States which remains to be filled. The latter has not yet recovered from its political turbulence, and experts believe that she will never regain her pre-war position in the world market. India, also a big sugar producer, has difficulty even in supplying her own domestic needs. Taiwan, therefore, has become the only big supplier in the Far East and Middle East markets. By reason of its proximity to these places, it has a freight advantage over Cuba and other big suppliers. It is estimated that there are, markets for at least more than half a million tons outside of Japan. In addition, Egypt, the Arabian countries on the Persian Gulf, and even Greece are potential markets for Taiwan sugar. A conservative estimate of Taiwan's sugar exports may be set at one million tons a year. When the Chinese mainland is recovered, another half million tons of Taiwan sugar can be easily sold.

The following table shows the sales of Taiwan sugar since 1947:

It is estimated that Taiwan's sugar exports in 1952 will reach 450,000 metric tons.