Wil­mar claims

Whitsunday Times - - WHITSUNDAY VIEWS -

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

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