Sugar prices, floods leave bitter taste
FAR Northern cane growers are going into this year’s season uncertain of what lies ahead due to a “historical drop” in the world sugar price and impacts from flooding.
Tully Sugar Mill will start accepting cane for the 2018 season on Monday and is expected to continue operation until November.
Canegrowers chairman Paul Schembri said, while sugarcane harvesters and mills were firing up for the season ahead, it wasn’t all rosy.
“This is our busiest and most exciting time of year, but we have a few clouds hanging over our heads in the form of a low world sugar price and looming, restrictive state regulation,” he said.
“Across the cane regions the low world sugar price is causing despondence. The ICE #11 price has dropped 20 per cent so far this year and is now below our costs of production.
“We’re angry that it’s not just supply and demand at play but subsidised sugar is also distorting the world trade.”
Mr Schembri said flooding in the Far North earlier this year had also severely damaged some cane fields and reduced the potential of others.
He said debris and erosion would be a challenge for harvesters.
Tully sugar cane grower and Canegrowers Tully director Chris Condon said he was expecting an average crop this season, but the low market price was the major concern.
“It is in historical lows … I don’t think we’ve hit the bottom of the trough yet and it’ll probably dip a bit lower,” he said. “The market is definitely a challenge for the industry but I think the crop is looking OK … so thank God for the option of forward pricing.
“A lot of growers had already locked in favourable prices for a portion of their crop for 2018 and 2019 and some growers have got some favourable prices. It’s a good option to have and it allows you to make better decisions.
“But by the end of 2019 it could look a bit better and in 2020 hopefully back into high prices … but that’s agriculture.”
WE’RE ANGRY THAT IT’S NOT JUST SUPPLY AND DEMAND AT PLAY
CANEGROWERS CHAIRMAN PAUL SCHEMBRI