Sugar pric­ing probe hopes to cor­rect ‘ failed sys­tem’

Townsville Bulletin - - Investor - Martin Rasini

CANE­GROW­ERS is poised to launch an in­ves­ti­ga­tion into sugar pric­ing fol­low­ing dis­pute over a $ 105 mil­lion hole in 2010 sea­son sugar ex­port in­come which, it says, shows the present sys­tem has failed cane farm­ers.

C h i e f e x e c u t i v e S t e v e Green­wood said yes­ter­day the in­ves­ti­ga­tion aimed to re­solve is­sues at dis­pute bet ween cane f arm­ers and millers so that they could not arise in the fu­ture.

Millers and grow­ers are at odds over the $ 105 mil­lion in losses in­curred by Queens­land Sugar, which was un­able to meet sale com­mit­ments af­ter the 2010 wet har­vest sea­son, which cut sugar con­tent and left mil­lions of tonnes of cane in pad­docks.

Millers have called f or grow­ers to bear li­a­bil­ity, claim­ing it is an ex­traordi nary mar­ket­ing cost t o which farm­ers are re­quired to con­trib­ute.

How­ever, grow­ers view it as a trad­ing loss for which they bear no re­spon­si­bil­ity, and moves are afoot to launch legal ac­tion.

Mr Green­wood said, af­ter months of ne­go­ti­a­tion and count­less dol­lars spent to se­cure ad­vice, res­o­lu­tion of the is­sue con­tin­ued to evade the sugar in­dus­try.

Millers and grow­ers also are split as to whether the loss should be borne solely by grow­ers who for­ward-

Steve Green­wood priced or by all grow­ers.

Mr Green­wood said the dis­pute showed present pric­ing ar­range­ments were im­ma­ture.

‘‘ Many cane farm­ers are feel­ing an­gry, frus­trated and let down by what they un­der­stood was a for­ward-pric­ing sys­tem they could rely upon t o b e t t e r ma n a g e t h e i r risks,’’ he said.

‘‘ It would now ap­pear that this is not the case.

‘‘ Cane­grow­ers is com­mit­ted to tak­ing charge of this is­sue and fix­ing it so we will not be faced with it in the fu­ture.

‘‘ The in­ves­ti­ga­tion is about iden­ti­fy­ing work­able sol- utions and driv­ing nec­es­sary changes to build a more ro­bust sys­tem.’’

Is­sues for re­view in­clude grower ac­cess to the Raw Sugar Sup­ply Agree­ment; grower in­volve­ment in QSL mar­ket­ing, sell­ing, pric­ing and crop es­ti­mate de­ci­sions; con­tin­ued grower ac­cess to fu­ture pric­ing pro­grams; and full trans­parency of the mar­ket­ing and pric­ing sys­tem.

Mr Green­wood said Cane­grow­ers, within a fort­night, woul d c a n v a s mem­bers’ views as to what they wanted from an amended pric­ing sys­tem, work fur­ther with pric­ing spe­cial­ists and ad­vis­ers, and par­tic­i­pate in a QSL work­ing group.

QSL chief ex­ec­u­tive Neil Tay­lor an­nounced for­ma­tion of the group last week, say­ing the in­dus­try needed to adopt a ro­bust, sys­tem-wide ap­proach to re­view­ing pric­ing and risk op­tions so that changes would de­liver re­sults for all.

Mr Green­wood said Cane­grow­ers would ex­am­ine the pric­ing sys­tem, the ac­tions of all in­dus­try sec­tors in­clud­ing QSL and millers, and iden­tify changes that must be made.

‘‘ Af­ter the in­ves­ti­ga­tion, Cane­grow­ers will clearly ar­tic­u­late and ag­gres­sively pur­sue changes that need to be made to fix the sug­arpric­ing sys­tem,’’ he said.

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