Cunning Wilmar plays us all

THE sugar industry’s still unresolved dispute could be précised into a modern- day Punch and Judy Show as follows:

“With the cruel stepsisters – State Government, the invitation to the ball – Wilmar’s monopoly buying into the market, the handsome prince – State Opposition Party, the fairy godmother in the Real Choice in Marketing Bill ( Qld) 2015, while Cinderella’s dress turning to rags at midnight could be compared to the farmers’ inability to forward contract price and watching the said price go south thereafter. The glass slipper left behind, of course, was the fairy god- mother’s big brother’s doing Federal Code of Conduct.”

To understand Wilmar’s corporate strategy in this it is necessary to realise that there are two sides to its sugar operations – its sugar production side, embodied in the mills and operations bought with FIRB approval, and the sugar trading side, wherein it buys and sells sugar on a worldwide basis.

Traders in any commodity have but one mantra – to buy low and sell high.

Wilmar the Sugar Miller showed its hand early when it rationalised its workforce by cutting workers’ hours in a while Wilmar the Sugar Trader, after promising brighter futures to growers and mill workers, started to flex its monopoly power and dropped all agreements to fair choices for farmers to supply cane to the miller and sugar to the world.

The Government ignored growers’ warnings about these actions and farmers with minor party support legislated the Real Choice in Marketing Bill in the Queensland Parliament, the provisions of which were accepted by all Queensland millers except Wilmar. Sugar prices then hit record highs but because cane growers in Wilmar’s areas did not have contracts to sell because of Wilmar’s intransigence, they could not contractually take advantage of the higher price.

Wilmar again stalled in the negotiations and prices continued to rise.

Then the feds came to the “rescue” with a “Code of Conduct”, which is all Judy and no Punch, as growers under the code could not forward price at the $ 60 per tonne level but Wilmar the trader could.

Further delays in negotiations have seen prices drop to $ 46 per tonne. Taking an average farm producing 10,000 tonnes per annum, this works out at a loss per farm of $ 140,000, of which the vast majority would be spent in the surrounding towns of the cane growing areas.

Consider, however, Wilmar the Trader’s position. It has 13,000,000 tonnes of uncontracted sugar sitting in its mills, and has already forward sold much at the higher prices; it will be making a killing while the Queensland cane growing regions in which it operates suffer.

It appears that Wilmar has played a cunning corporate game here.

We have been played for patsies and it is costing us dearly.

SAM COX, One Nation candidate for

Burdekin/ McMaster