Bundaberg Sugar announces closure of 135-year-old Bingera sugar mill following low cane supply

The Bingera sugar mill near Bundaberg will not crush again as the mill operator Bundaberg Sugar Limited (BSL) says it will close the site this year.

Chief executive Guy Basile said BSL was streamlining its operation to just its Millaquin mill in Bundaberg.

“One thing has become clear; the Bundaberg region tonnage figures of the past years, including the 2020 crush, cannot justify BSL running two mills in the region,” he said.

“Millaquin is more than capable, thanks to our ongoing investments in the future of BSL.

“At the current crop size, BSL mills are operating at around only half capacity.”

Bingera mill had one of the worst seasons in its history, only crushing 450,000 tonnes of sugar cane.

The total BSL crush this year was just over 1 million tonnes, which was down from 1.8 million in 2016.

Consultations with workers

BSL management has started consultations with employees and unions across its whole operation.

As for growers, not much will change according to Canegrowers Bundaberg chair Allan Dingle.

“From what I understand the mode of transport for all growers to Millaquin mill will be the same as what it was previously,” he said.

“If you’re on a railway line service you’ll still be on exactly the same bin delivery system.

“Bundaberg Sugar has said all their contracts will be honoured.”

Mr Dingle said farmers still need more information from BSL.

“The only point, probably, that’s going to be an issue will be season length,” he said.

Mr Dingle said the news was difficult news for the industry.

“It’s really sad that that’s happened,” he said.

“That mill’s been operational for well over a hundred years.

“It seems to be a sign of the times in our local area; for whatever reason, the [other] crops are moving in.

“There’s quite a few of those growers that are still there that are committed to growing cane and will continue to grow cane.”

2020 harvest: Sugar industry watches La Nina with concern

THE sugar industry says the rain bringing La Nina weather system is a cause for concern with more than 30 per cent of the 2020 cane crop still to be harvested.

Jim Crane from the Australian Sugar Milling Council said the confirmation of a La Nina weather pattern heightened the risk of rain disrupting the final weeks of the crush.

“La Nina-influenced light rain will be manageable and welcome, but heavier falls could be challenging towards the end of the crush,” Mr Crane said.

“That being said, spring rain can set the foundation for an improved 2021 crop across most of the cane growing regions.

“Thanks to the unseasonal winter rains already experienced this year, we are currently on track to realise the forecast crop size of 30.9 million tonnes.”

Mr Crane said there was almost a million tonnes of cane more this year, but the sugar content is tracking below the 2019 average. A continuation of this trend will mean that 2020 raw sugar production was likely to be only slightly up on last year’s 4.28 million tonnes, he said.

“2020 has certainly been a year of challenges to date, but business continuity planning and early development of comprehensive COVID-19 related workplace health plans have enabled sugar mills to operate, in large part, as normal,” Mr Crane said.

“With many innovative adjustments, sugar milling companies have largely been able to operate with a full complement of staff throughout the pandemic, allowing us to continue to make an important economic contribution to many regional communities.”

The sugar industry generates more than $4 billion to the Queensland economy each year and supports more than 23,000 jobs.

Sugar harvest in North Queensland hits halfway mark

The sugarcane crushing season is nearing the halfway mark in North Queensland, with Wilmar’s eight mills having processed over 45 per cent of the estimated crop.

Wilmar’s mills had last week processed 6.82 million tonnes of cane of the estimated 15.07 million tonne crop.

Cane supply and grower relations general manager Paul Giordani said improved weather conditions in recent weeks had enabled both the harvesting and milling sectors to make good headway.

It comes after wet weather delayed the start of the 2020 crush across all growing regions.

Mr Giordani said five consecutive weeks of fine weather had resulted in good throughput in the Herbert, where 1.83 million tonnes of cane had been crushed.

It is expected the district will have crushed 2 million tonnes of the estimated 4.16 million later this week.

He said CCS levels had taken a favourable jump to 13.65 in recent weeks and the crop was holding to estimate.

Similarly on the Burdekin, a run of fine weather has seen cane quality improve and the average CCS has climbed above 15 units.

“Our Burdekin mills are achieving good crushing rates overall,” Mr Giordani said.

As of last week, the district had crushed 3.75 million tonnes of the estimated 8.04 million and they were expected to hit the halfway mark this week.

At Proserpine, the mill is achieving weekly throughputs above 90,000 tonnes.

Mr Giordani said CCS had jumped above 14 units over the past fortnight and continued to rise steadily.

With 678,000 tonnes of the estimated 1.62 million tonnes crushed, Mr Giordani said the crop was cutting just below estimate.

At Plane Creek, CCS steadily increased to 14.04 units last week but is trending below budget.

“Our focus in the coming weeks will be on maintaining rate as CCS approaches bottleneck levels,” Mr Giordani said.

They have crushed 564,000 tonnes of the estimated 1.25 million tonne crop.

Maryborough sugar mill likely to close after this year’s crush

The Maryborough sugar mill is likely to close after the 2020 crushing season, according to local state MP Bruce Saunders.

He said discussions had started with stakeholders to determine where the cane could be crushed.

“What I believe is happening is that the Maryborough cane for the next two seasons after this season will be crushed in Childers,” he said.

“The [Isis Central] mill has approached the Government with a request for some financial help to expand the mill.”

This comes after mill operator MSF Sugar, owned by Thai Company Mitre Phol, entered a deal to sell more than 5,000 hectares of cane farmland.

Under the deal, most of the land would be converted to macadamia orchards resulting in the mill losing a third of the cane it crushes on an annual basis.

MSF Sugar has a cane supply agreement with growers until the end of the 2022 season, meaning they are required, until then, to crush the cane or assist it being crushed elsewhere.

It is understood they might provide a subsidy to get the cane trucked to the Isis Central Sugar Mill.

Still a viable business

Maryborough Canegrowers chair Jeff Atkinson said they wanted some certainty as growers were left wondering if they should even plant this year.

A cane truck drives past a tall cane with dust billowing behind.
Discussions are underway to truck the Maryborough cane to the Isis Central Sugar Mill near Childers for crushing.(ABC Rural: Lara Webster)

“We will work with the milling companies to have a viable industry still in Maryborough,” he said.

“There are cane growers, the transporters and the harvester contractors — they’re all still a viable business.”

Mr Atkinson said sending the cane on trucks to ICSM was a feasible solution.

“One of the benefits we have is the Maryborough area has already been using road transport — so we do have some knowledge of how this all works,” he said.

But he said the logistics need to be worked out as the ICSM uses trains rather than trucks to transport cane to their mill.

Out of the 90 growers that supply the mill, a number come from the Sunshine Coast region.

Mr Atkinson said those growers had been left with no options.

“I believe it’s too far, to be honest, and that’s something that’s got to be sorted,” he said

“That’ll be an issue for MSF to sort out but long-term that’s not a viable option to bring the cane that far North.

“It’s a low-value product so once you start putting a huge freight cost on, it doesn’t stack up.”

End of an era

Mr Atkinson said the mill had stood proud for 126 years in the Maryborough township.

“That’s a long time to employ people. There’s been a lot of people have jobs there,” he said.

Mr Saunders said closing the mill could result in dozens of jobs lost.

“I’d say we’d probably lose over 60 direct jobs there. That’s going to have a profound effect throughout the community,” he said.

“In the middle of a pandemic, we cannot afford to lose any more jobs.”

In a statement to the ABC, MSF Sugar Company Secretary Brad Egerton confirmed discussions were underway.

“The company, together with other sugar industry stakeholders, has examined the various options for the crushing of cane that is grown in the region,” he said.

“However, I confirm that to date no decision has been made by MSF Sugar to cease operations at the Maryborough Mill.”

Sugar price bounce cause for ‘measured optimism’

For Queensland cane growers who have faced returns equal with, or less than, the cost of production for most of the past 18 months, the upward movement in the world sugar price this month has been very welcome.

Paul Schembri, who has 180 hectares under cane in the Mackay district, said the bounce was cause for ‘measured optimism’.

“We did have a short-lived rally in prices at the start of this year when there was a downgrade in production estimates in areas like Thailand, the United States and Brazil,” he said.

“That assisted growers but generally speaking prices have been depressed for a long time and COVID has really smashed things.”

Mr Schembri, who is also the chairman of Canegrowers Queensland, said rain had disrupted the harvest in the northern region but the growing season had been an improvement on the previous year.

“Drought was still prevalent in southern regions but in the north we had a wetter growing season,” he said.

Along with the low price headwinds and the ever-constant weather concerns, the biggest challenge facing cane growers at the moment was the ‘over zealous nature of governments to regulate’, particularly bureaucratic reef regulations, Mr Schembri said.

Sugar price rebound sweetens La Nina risk

Rebound global sugar prices are putting a spring in the step of Queensland cane growers who have been hampered by wet weather hold-ups since the crush started in early June.

Raw sugar traded in New York on the Intercontinental Exchange (ICE), the global benchmark, broke through the US13 cents per pound barrier last week for the first time since March.

Analysts say that has been on the back of easing lockdown restrictions, the resumption of food service, strong demand from Asia where drought has hit local crops and speculative moves by funds shifting to a bullish outlook for sugar.

Queensland’s 18 sugar mills have crushed just over 10 million tonnes, down between two and three million on the anticipated volume, with most regions affected by wet weather.

Increased odds of a La Nina forming in the next months, as touted this week by the Bureau of Meteorology, are now causing further concern.

Queensland is around 30 per cent of the way through its 2020 crushing season but some mills are now reporting the finish will be pushed back into December.

The forecast was for a total crush of just under 31m tonnes, which would be up 1m tonnes on last year but still in line with an overall sugar production decline trend of the past five years. In 2016, for example, 36m tonnes was crushed.

Australian Sugar Milling Council director of industry affairs Jim Crane said a range of impacts, not the least being the fall in world sugar prices, was driving that trend.

Drought conditions in southern regions in recent years, and the loss of cane country to other crops, were also at play, he said.

The crush figures to date equates to the manufacturing of 1.5m tonnes of raw sugar, out of the forecast of between 4.2 and 4.5t.

Sugar content was also running a bit behind as a result of rain, Mr Crane said.

COVID has not impeded the crush and maintenance season was able to be completed at all mills, despite being in full flight when lockdown restrictions came into force in Queensland in autumn.

Mr Crane said having the time to prepare social distancing and health plans well before crushing started was a benefit.

In northern NSW, where 5pc of the nation’s sugar is produced, the three milling areas of Broadwater, Tweed and Harwood are expected to turn off 1.6m tonnes of sugar cane.

Global outlook

While 12-month expectations for raw sugar futures are still subdued, demand prospects in Australia’s major export markets of Korea, Japan and Indonesia are showing some positive signs and will be supported by the low Australian dollar.

The pandemic has both increased production of sugar around the world and flattened consumption, putting heavy downward pressure on already depressed prices.

Rabobank commodity analyst Charles Clack said the sharp drop in oil prices meant ethanol fell out of favour, so mills in Brazil, the world’s largest producer and exporter of sugar, switched to making more sugar.

That was compounded by lockdowns taking cars off roads across the globe and forecasters began to talk of a far smaller global deficit of sugar than originally anticipated for 2020.

Rabobank’s latest projection is for a deficit of 4.3m tonnes raw value through the 2019-20 season, revised from its previous estimate of 6.7m.

At the same time, the bank has now lowered its forecast for global sugar consumption for the year ending October, from flat to a 1pc decline, largely driven by the pandemic’s impact in countries such as India, Indonesia and Brazil.

The Australian Bureau of Agricultural and Resource Economics and Sciences believes the world indicator price for raw sugar will fall to a decade low of US10c/lb this financial year.

Mr Clack said strong demand from Indonesia and China had delivered some strength to sugar prices this year.

Indonesia’s harvest was hit hard by drought and its government sought to import greater volumes to help control a price surge, he said

China, meanwhile, has been looking to lift its stockpiles and address smuggling issues.