Optimism high for sugar prices

Australian sugar growers can expect strong prices despite an international price drop.
Australian sugar growers can expect strong prices despite an international price drop. File

DESPITE the fact world sugar prices have fallen away in recent months, there is still a lot to be optimistic about for sugar prices.

In recent months world sugar prices have come off highs of about 28 cents per pound / lb (US) to be currently trading about 21 cents. / lb US.

The cooling off of sugar prices reflects a broader softening of world commodity prices.

More particularly for sugar, market commentators are predicting the first global surplus of world production to world consumption in three years.

This global surplus comes as no surprise given that world sugar prices have been quite high for over more than three years and it was always certain a production response would push the production consumption equation back into balance.

Normally any market sentiment pitched towards global surplus would result in a collapse of sugar price.

However this has not been the case this time around as the price is still trading at levels between 20 to 22 cents per pound. / lb. These are quite strong prices.

The exchange rate is finally going in the right direction and the fall away of the Australian dollar to the US greenback has somewhat offset the reduction of sugar price.

In summary, while a global surplus seems certain, world sugar prices have not collapsed and these prices are still being supported by strong global demand for sugar.

I remain optimistic that sugar prices will continue to trade at quite strong values.

Great Barrier Reef Marine Park Authority (GBRMPA) chairman Russell Reichelt was guest speaker at Canegrowers Mackay's annual Mackay Area Committee (MAC) information meeting.

It is encouraging that Dr Reichelt commended Mackay cane farmers and cane farmers in general for the great strides we have taken towards environmental sustainability.

Far too often we as an industry have had to defend our environmental credentials from a whole range of detractors.

It is so pleasing that someone outside of the industry, in this case GBRMPA, has acknowledged that our cane farmers are innovative.

This innovation is resulting in land management practices that are on a par with some of the best land management stewardships in the world.

The Queensland sugar industry takes its environmental responsibilities very seriously.

Topics:  economy environment export farmers rural sugar

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