Farmers are remarkably resilient. Each year we rule a line under the previous season and replace it with new expectations that all of our hard work and perseverance will be rewarded.
Each year, old foes revisit us and often new tests will emerge – pests, disease, adverse weather and political challenges. But the optimist in me says that new opportunities will present themselves as well!
The world sugar price is a bright note for our industry in 2016. Last year we saw prices fall to around $320 a tonne taking our returns well and truly below the costs of production.
Over the past few months we have seen sugar prices strengthen to be more than $450 per tonne.
That rally is on the back of a tightening of the production/consumption equation to such a point that commentators predict a global deficit this year – the first for five seasons.
The Dubai Sugar Conference was told on the weekend that production will trail consumption by about 2.5 million tonnes this world production year (which started in October 2015).
Allied to the sugar price recovery has been an announcement in the Christmas rush that will also lead to better prices for Australian farmers in the future. The World Trade Organisation’s 162 member countries agreed to bring to an end all export subsidies.
Subsidies destroy the world price by pump priming up production which is then dumped on the world market where it has the effect of depressing the price.
For Australian growers who have 100% exposure to the world price, subsidies are toxic. Let’s hope that the world price will now be a greater reflection of the costs of efficient production as happens in Australia.
With the price looking up, and the low level of the Australian dollar also helping our income prospects, we also have a firm footing on which to sit down and discuss contracts for 2017 and beyond with the mills.
The amendments to the Sugar Industry Act passed by the Queensland Parliament in December give growers not only a choice of marketer but also equal negotiating power with millers.
I commend a number of mills which have already commenced dialogues to put these contracts in place and look forward to CANEGROWERS representing its members in this important process.
- PAUL SCHEMBRI, CANEGROWERS CHAIRMAN
