QUEENSLAND cane farmers and sugar millers are urging an escalation of government pressure on countries including India and Pakistan, which are dumping subsidised product on the world market.
CANEGROWERS chief executive officer Dan Galligan said the world sugar price was now well below the cost of production in Australia.
“With the appointment of Senator Simon Birmingham as Trade Minister, we will be seeking to make sure he fully understands the importance of this issue to our industry,” Mr Galligan said.
“The world raw sugar price (ICE-11) has fallen to a 10 year low recently because there is a surplus on the world market and that surplus is bigger than it should be because India and Pakistan are exporting subsidised sugar.
“We have no issue with countries providing supports for their farmers but when that support distorts trade because subsidised surplus sugar is pushed onto the world market causing prices to collapse, we get angry.”
Mr Galligan said at the current levels, the Australian sugar industry was facing massive losses in the vicinity of $500 million this year.
“A large part of that is money lost from the incomes of thousands of farming families,” Mr Galligan said.
“We are efficient producers of a quality export commodity which earns the Australian economy more than $2 billion a year.
“But we cannot compete against subsidies provided by other governments which may in fact breach World Trade Organisation rules.
“CANEGROWERS is urging the Australian Government to take all steps available, to open a dialogue about this situation with India and Pakistan and, if necessary, initiate formal action in the WTO to have the trade-distorting subsidies removed.”
The Australian Sugar Milling Council (ASMC) is also calling for the Australian Government to challenge sugar trading nations who continue to flaunt international trade rules.
“Government policies in India and Pakistan, such as minimum prices for sugarcane and export subsidies, are contributing to an oversupply of sugar on the world market and Australian sugar prices have slumped to 10-year lows” said David Rynne, ASMC’s director of trade and economics.
ASMC has provided detailed analysis and is working with the Department of Foreign Affairs and Trade to finalise the nature and quantum by which WTO rules have been contravened.
“We look forward to briefing the new Trade Minister, Senator Birmingham, on this issue, which continues to have a profound and immediate effect on the viability of our industry,” Mr Rynne said.
He said next steps should include high-level bilateral negotiations, and if necessary, the commencement of formal WTO dispute proceedings.
“The remedy is the elimination of non WTO-compliant subsidies and the prevention of subsidised sugar entering the export market,” Mr Rynne said.
The Australian sugar industry is working with counterparts in the other sugar exporting countries including Brazil, Thailand and Guatemala on legal and economic investigations which could support action in the WTO.
