Su­gar looks up

Port Douglas & Mossman Gazette - - FRONT PAGE - Shane Ni­chols

THE su­gar price is noth­ing to write home about at the mo­ment but the re­gion’s cane grow­ers may be in for a cash har­vest if price es­ti­mates for the next half decade turn out to be ac­cu­rate.

The cur­rent spot price for a tonne of su­gar is $420, but fu­ture swaps out to 2018-19 are pric­ing $480.

For as­tute grow­ers who take ad­van­tage of lock­ing in fu­ture prices, even 2016’s es­ti­mate of $468 is look­ing good.

The su­gar price has fallen re­cently but ac­cord­ing to Rabobank’s Queens­land re­gional man­ager Chris Adams ‘‘the fun­da­men­tals are still there’’.

The big su­gar ter­mi­nal fire in Brazil last month has not had much im­pact on prices, more than off­set by the sup­ply ex­pected from In­dia and Thai­land.

Rabobank is pre­dict­ing a fourth con­sec­u­tive year of sur­plus, with global raw stocks reach­ing over­sup­ply of 5.4 mil­lion tonnes.

‘‘the mar­ket can han­dle that be­cause we’re find­ing new mar­kets all the time,’’ Mr Adams said. ‘‘But if it builds up more than that, it could be a prob­lem.’’

The global stock to con­sump­tion level ra­tio is ex­pected to reach 44 per cent in Septem­ber 2014, which is 4 per cent above the 10-year av­er­age.

He said the fore­cast de­pre­ci­a­tion of the Aus­tralian dol­lar against the green­back – which is ris­ing as Amer­ica’s econ­omy im­proves – is a fil­lip for grow­ers.

At cur­rent prices the grow­ers can make money, he said. ‘‘It’s a res­on­able price.’’

De­spite fall­ing prices re­cently, ‘‘the mar­ket hasn’t pan­icked at all, it can see what’s ahead of it.’’

Mean­while, the Aus­tralian su­gar in­dus­try is in over­drive to con­vey the mes­sage that su­gar must not be ex­cluded in the cur­rent round of key world trade talks.

Peak group Cane­grow­ers says if su­gar is left out of trade ne­go­ti­a­tions this time it could be decades be­fore the Aus­tralian in­dus­try gets another chance at real re­form.

Cane­grow­ers says su­gar has been the sac­ri­fi­cial lamb in some trade agree­ments in re­cent years, most no­tably in the US trade agree­ment when su­gar was dumped at the last minute be­cause ‘‘big su­gar’’, which car­ries enor­mous po­lit­i­cal sway in the US, pres­sured the US gov­ern­ment to con­tinue its an­ti­quated pro­tec­tion­ist pol­icy and quash any im­proved ac­cess for Aus­tralian su­gar.

It is a de­ci­sion that has plagued trade talks ever since.

‘‘That kind of pro­tec­tion­ist be­hav­iour is out­moded and should be a thing of the past for any coun­try which be­lieves it­self to have a fair and eth­i­cal trade plat­form,’’ said Paul Schem­bri, chair­man of Cane­grow­ers.

‘‘The whole idea of trade re­form is to re­move trade re­stric­tions and level the play­ing field. This is im­por­tant to Aus­tralian grow­ers to re­main com­pet­i­tive on the global mar­ket, be­ing amongst the few farm­ers world­wide that are not propped up by sub­si­dies.

‘‘Re­mov­ing bar­ri­ers to mar­kets will make Aus­tralian su­gar more at­trac­tive to im­porters and cre­ate more op­por­tu­nity for our ex­ports.

‘‘Our grow­ers can’t com­pete at all su­gar’s left out.

‘‘ With 80 per cent of our prod­uct ex­ported, Aus­tralian cane­grow­ers must have im­proved mar­ket ac­cess op­por­tu­ni­ties. This will lift in­come and cre­ate job op­por­tu­ni­ties in re­gional Aus­tralia."

Aus­tralian su­gar is us­ing ev­ery av­enue open to it to un­der­score how im­por­tant su­gar’s in­clu­sion is, as the Trans Pa­cific Part­ner­ship (TTP), the long-run­ning trade ne­go­ti­a­tions be­tween 12 Pa­cific Rim coun­tries, ap­proaches fi­nal­i­sa­tion.


Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.