A risky business
THE former chief executive of Queensland Sugar has questioned the exporter’s performance, saying much of the $ 105.5 million loss it incurred from the 2010 season ‘‘ would appear to be a result of poor risk management’’.
John Pollock said yesterday it appeared QSL had not considered the impact of n e w r a w s u g a r s u p p l y agreements and had applied t o a one million t onne seasonal pool a risk management policy previously applied to a pool up to three times larger.
However, QSL said Mr Pollock’s claims contained factual inaccuracies and, with distribution of losses agreed among millers, its focus was on working with all industry players ‘‘ to ensure the appropriate balance of flexibility, transparency, optimal returns and effective risk management’’.
Mr Pollock said the agreements, accompanied by a new board in 2009, allowed millers to price up to 70 per cent of forecast sugar production, with the balance p r i c e d b y Q S L i n t h e had not only failed to manage production risk, but had multiplied it by adopting an in-season marketing plan.
‘‘ QSL’s defence is that its decisions were made using guidelines agreed by the industry, but the truth is the new board was brought in to develop new policies to manage a vastly different risk environment,’’ he said.