AUSTRALIA’s cane farmers says they are devastated following the India government’s decision to dump five million tonnes of subsidised sugar onto the world market.
The New York sugar futures price (October ’18 raw sugar futures contract) on 27 November 2017 was US15.47c/lb. Overnight it fell to US9.9c/lb which represents a fall of US5.5c/lb in 10 months. This equates to a fall of US$122.8/tonne or A$170.55.
CANEGROWERS chairman Paul Schembri said said the Australian Government must now stand up and take the issue to the World Trade Organisation.
“India is exporting its domestic problem of failed sugar policies which encouraged over-production,” Mr Schembri said.
“Australian growers must not be left to bear the costs of India’s breach of international trade rules.
“On the back of the news that India’s industry is getting the equivalent of a $850-million-dollar assistance package including help to export its subsidised sugar, the global price plunged below US10c/pound overnight.
“The price was already below our costs of production, so this further drop is another hit to Australian cane growers and their rural communities.”
Mr Schembri said in the past 10 months, the sugar price had already fallen the equivalent of A$156/tonne as a surplus market anticipated Indian subsidised exports. With the Indian government confirming the exports will take place, the market fell by a further $14/t overnight to be just on $300 per tonne.
“We don’t want subsidies or handouts,” Mr Schembri said.
“We want the Australian Government to roll its sleeves up, partner with the other affected countries who are members of the Global Sugar Alliance and call India to account before the World Trade Organisation.
“We’ve done some preliminary analysis which clearly indicates that India is in breach of WTO rules.
“Our industry has been deregulated, throwing us to the mercies of the world market and completely exposing Australian growers to the movements of the world sugar price.
“We work hard and are efficient producers of a top-quality export product.
“Now is the time for the Australian Government to back us where it counts and insist that India stick to the rules and remove its trade distorting subsidies.”