A downgrade of the sugar crop in Australia’s largest growing region has been blamed on ongoing uncertainty about sugar marketing arrangements.
In the Burdekin region, south of Townsville, Wilmar is yet to begin negotiating with suppliers to its four sugar mills next year.
Wilmar executive general manager John Pratt said the company was still working through the complexity of the new sugar marketing legislation introduced in December.
But grower collectives have maintained the changes are relatively minor and claim they have not prevented other milling areas from reaching ‘broad agreement’ on cane supply next season.
An unofficial estimate released by Canegrowers Burdekin puts the current crop at 7.6 million tons, down by 600,000 tons from last year.
It said delays in securing a cane supply agreement with the miller was weighing heavily on growers, as they contemplated an investment of up to five years of planting and growing a sugar crop.
Without a contract to crush their cane, contractor Gary Stockham said growers were delaying the decision to plant new cane and were looking at other options.
“Well I just know my growers in my area, in my group, they’ve said they’re going to go out to 18 months fallow, they’re going to try a few beans, a bit of rice in the next few years,” Mr Stockham said.
“It’s only early yet but in my area I’d be 10 to 20 per cent less than last year.
“Some growers aren’t worried about contracts, they’ll plant a bit of cane and see what happens, but some growers are definitely not going to grow cane because of the fact there is no contract and Wilmar not coming to the table to discuss things.
“You know, nothing’s happened yet and people are getting worried.
“The longer they wait, the worse it’s going to be, because people do want to know their future and what’s going to happen on their farms.”
Mr Stockham, whose contract business is based at Giru, said the impact of the marketing impasse had been exacerbated by prolonged dry weather and uncertainty about future water allocation from the Burdekin Dam.
Canegrower collectives in the Burdekin, Herbert River, Proserpine and Mackay districts have indicated they are willing to meet with Wilmar in the coming weeks.
Wilmar declined to be interviewed, but recently sought to clarify its reasons for not moving into discussions with growers as it sought to clarify the implications of the Sugar Industry (Real Choice in Marketing) Amendment Act.
“The Act establishes a very complex and potentially costly set of commercial and legal relationships between growers and mills, growers and marketing entities, and mills and marketing entities,” it stated.
“The implications have not yet been fully explored, let alone fully understood.”
Source – ABC