Outlook a little bleak at the beginning of crushing season

AGRICULTURE

STAFF WRITERS

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Motorists are asked to be extra careful around rail crossings in the coming months as the raw cane is transported to the mill for processing. IMAGE supplied.
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The sugar crushing season is officially underway with sugar mills across the state preparing for the season, which will run from June through to late November for most.

Motorists are asked to be extra careful around rail crossings in the coming months as the raw cane is transported to the mill for processing.

However, the Australian Sugar Milling Council (ASMC) says the nation’s 24 sugar mills are expected to manufacture fewer than the 4.7 million tonnes of raw sugar produced in 2018.

“Good news is a little hard to find, with the cane crop estimated at 31.6 million tonnes – 2.5per cent down on 2018 - and world prices stuck in a range well below our average cost of production,” said David Pietsch, CEO of the ASMC.

“Weather conditions have not been ideal - too wet in the north and too dry in the south – and market conditions have created uncertainty.”

In recent years a huge surge in sugar production in India, subsidised by the Indian government, has swamped the market and driven prices down to 11.5 - 13.5 US cents per pound.

“Most of our raw sugar is exported onto the highly competitive global market so the impact of the extra subsidised sugar has been profound,” said Mr Pietsch.

Estimates from independent analysts calculate the revenue loss to the Australian sugar sector at more than $469 million over the three years from 2017/18 to 2019/20.

“Talks with the incoming Trade Minister will be a priority for ASMC. We’re hoping for a prompt start to what will be a lengthy, but important dispute process at the WTO in Geneva,” he added.

ASMC expects a formal Dispute Panel to commence at the World Trade Organisation (WTO) in the coming weeks.


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