Sugar farmers get jitters
Price falls as crush powers up
CANEGROWERS will be nervously watching the sugar price after a market downturn resulted in a drop of hundreds of dollars per tonne in the past six months.
Sugar cane fields are being slashed and steam is rising across the Far North as sugar mills become hives of activity for the start of the 2017 crush today.
Canegrowers chairman Paul Schembri said prices had slipped from $700 per tonne to between $400 and $450, which he described as a “massive correction in the market”.
“Six months ago I guess basically there was a view that the world market situation would be one that will produce a substantial deficit,” he said.
“Since then there has been a recast of projections in supply and demand that indicate we are facing a balance or possible surplus and that has been taking some momentum out of the price,”
About 3,710,000 tonnes are expected to be crushed at MSF Sugar’s Mulgrave, South Johnstone and Tablelands mills, down from the record 4,061,942 tonnes the previous season.
But, Mr Schembri said, although the low price was unfavourable, most Far North growers had locked in forward pricing and would not be impacted drastically from the downturn.
“The sugar price of today doesn’t necessarily represent the price that a farmer will receive for his production this year,” he said. “The real concern is how long will the prices stay down. If they do stay down for an indefinite period of time, there will be economic damage.”
MSF Sugar chief executive Mike Barry said the sugar industry could be unpredictable.
“Our mills, and indeed all our growers, work to achieve the best possible crop whatever the conditions,” he said.
“The crop is standing and presenting well for a good harvest.”
At the Mulgrave Mill, cane harvested from 14,600ha will About 3,710,000t is expected to be crushed at MSF Sugar’s three Far North mills, down from the record 4,061,942t. MULGRAVE MILL Starts today. Will crush about 1,370,000t, down from 1,521,612t SOUTH JOHNSTONE MILL Starts today. Will crush about 1,609,952t, down from 1,721,178t TABLELAND MILL Started on May 30 Will crush about 730,000t, down on last year’s crush of 819,152t Canegrowers say prices that growers receive have slipped from $700 per tonne to between $400 and $450 in the past six months due to a “massive correction” in the global market” be supplied by 185 growers during the 2017 season, which is expected to get through 1,370,000 tonnes of sugarcane.
Mulgrave mill manager Chris Hoare urged residents to be on the lookout for cane trains, which operated around the clock.