Mackay sugar industry defies Covid with $754m boost

Growers resisted a Covid experienced in other industries to record a bumper crop in 2020-21 and high prices are predicted to hold throughout 2022 and 2023.

The sugar industry has remained sweet on Mackay over the past two years despite the ruptures of Covid, with the region’s mills in Farleigh, Marian, Plane Creek and Racecourse contributing $754.6m across 2020-21 in wages, business activity, cane payments and local government payments.

The Australian Sugar Milling Council figures exceed the pre-Covid 2017-18 season, which recorded a combined spend of $735m.

ASMC CEO Rachele Sheard said when the economic multiplier was added, the total contribution of the industry to the Mackay region was $937.5 million.

Australian Sugar Milling Council chief executive officer Rachele Sheard reads through the 2020-21 industry report with economics, policy and trade director David Rynne. Picture: Supplied

“Significantly, the total spend by sugar mills in the Mackay region in 2020-21 was almost $20 million higher to 2017-18 when average global sugar prices were stronger in the preceding years,” she said.

“Sugar prices being $80 per tonne weaker in the three years leading into 2020-21 compared to the three years before 2017-18.

“The sugar millers in the Mackay region have shown their resilience and continued to deliver a positive economic contribution and job certainty amid a global pandemic and challenging global trading and growing conditions.”

Weather-permitting, the good times look set to roll on.

Queensland Sugar Limited expects canegrowers to enjoy favourable raw sugar prices out to 2024.

After bottoming out in July 2020 at just more than $360 per tonne, prices escalated to an average of more than $500 across 2021.

These levels are predicted to hold throughout 2022 and 2023 below falling just below $500 per tonne in 2024.

Cane fields near Farleigh Mill, north of Mackay. Picture: Kirili Lamb

Aside from the eternal factor of weather, geopolitics and movements in other commodities play an outsized role in determining sugar prices, something chairman of Queensland and Australian Canegrowers Paul Schembri emphasises.

“What happens around the world can have a profound effect on the Queensland sugar industry,” he said.

“It’s still maintaining high values now.

“One of the factors, of course, is the oil price has gone up and that in turn means that the ethanol price goes up.

“And in Brazil, which is one of the largest cane-producing countries, that means more cane will be directed at ethanol rather than sugar.”

Mr Schembri, from Mackay himself, said the next crop also looked good for the region.

“The early indications point to a good crop again in Mackay, but weather can change in a heartbeat,” he said.

He also noted the region would likely benefit from an improved export outlook.

More than 80 per cent of Queensland sugar is exported and export growth is pegged to expand with the recent signing of the Australian-UK Free Trade Agreement, which will open up a greater allocation for Australian sugar exports into a 65-million strong consumer market.

Queensland and Australian Canegrowers chairman Paul Schembri. Picture: Contributed

“One of the great things about the Queensland sugar industry and what we produce is that the sugar is well sought after,” he said.

“And by selling to multiple markets, we can capture the maximum premium value for Queensland sugar.”

State-wide, the report states the sugar manufacturing industry contributed $2.3bn in direct spending to the Queensland economy.

“This is still a world-class, highly efficient industry,” Mr Schembri said.

Following the report, Mackay Mayor Greg Williamson praised the industry’s contribution to Mackay and claimed it had a bright future moving forward.

“There is a growing world out there that is still requiring sugar,” he said.

“Sugar has been the mainstay for Mackay since about 1866 and it’s great to see another couple of years under our belt which really underpins in everybody’s view how important this industry is to our region.

“To see the number of people that are employed by the sugar industry, just under 5000, and the actual dollar contribution to our region, being so high, almost a billion dollars, that sort of says it in a nutshell.

“This is an industry that we know has been underpinning (Mackay) and here are the figures to prove it.”