WILMAR Sugar claims that they achieved $45 per tonne higher price than the growers received under the QSL system in the 2012 and 2013 seasons. The QSL average price is a net sugar price on the sugar it marketed, making this claim mischievous and misleading and, not by any stretch of the imagination, does it tell the full story.
Wilmar did not say that it compared its pricing approaches with different risk profiles.
The average includes the QSL buffer that was put in place by the industry (of which Wilmar is a part of ) to manage risk of production shortfalls such as weather impacts, as well as a storage peak component to manage the limit of sugar that can be stored in the terminals. This sugar is priced ‘in season ’. So, in this case, we have had QSL take the cost to manage the risk and storage components while Wilmar used it to their advantage in pricing their full economic interest.
The average also includes a number of growers’ individual pricing. These growers have quite rightfully taken a low risk profile and have chosen not to forward price, being content with, in this case, QSL’s lower harvest pool price
There are numerous growers taking a higher risk profile which makes up that average who have used forward pricing strategies through the QSL system to outperform even Wilmar’s performance, actually showing that better outcomes may be achieved if mills allowed QSL to perform.
Wilmar, why not compare ‘apples with apples’ rather than making such a blatantly misleading statement? This only contributes to the perception of a lack of transparency in your dealings with growers. Wilmar’s overzealous methods of pushing this forward is adding to my suspicion as to why you want your proposal so desperately.
Rick Garnham Cane Grower CARMILLA