A sweeter outlook tipped for global sugar markets

FAR North sugar cane growers have been given some reassurance with a new report revealing that the global sugar industry is now looking towards recovery.

As COVID lockdowns ease and food service resumes, world sugar prices are starting to rebound, according to Rabobank’s latest global Sugar Quarterly report.

In Australia, domestic prospects are starting to improve, with a favourable season driving production, elevated 2020 regional premiums helping buoy margins, and prospects of a low Australian dollar bolstering export opportunities, the bank says in its report for Q2 2020.

With the 2020 crush now under way in the Far North and other parts of the country, Rabobank commodity analyst Charlie Clack said wet weather delays had dampened early progress in the Burdekin, Herbert and Tully regions.

“As a result, crushing pace was some 20 per cent behind last season and 51 per cent behind the 2018/19 season,” he said.

“And with above-average rain predicted over coming months … a slow 2020 crush – and a late-season finish – was expected.”

However, Mr Clack said the favourable season had much improved yield prospects, with Australian 2020 cane production expected to reach 31 million tonnes, up one million tonnes year-on-year. Australian sugar production was forecast to reach up to 4.4 million tonnes, up marginally from 2019.

Mr Clack said the risks of COVID-19 disruption to the Australian crush remained low, following the industry’s implementation of measures to prevent virus transmission, as well as a low national infection rate.