Sugar harvest bitter sweet as global headwinds grow

Queensland’s sugarcane crop is tipped to rise to almost 30 million tonnes this year despite the $2bn sector facing growing headwinds including mill closures and a subsidy fight with India.

Queensland’s sugarcane crop is tipped to rise to almost 30 million tonnes this year despite the $2bn sector facing growing headwinds including mill closures and a subsidy fight with India.

The rolling 2021 harvest is set to start next week in Far North Queensland with the industry heartened by a slightly bigger crush than the 29.33m tonnes grown last year.

But Australian Sugar Milling Council chief executive David Pietsch said the industry had faced the closure of two mills in the last 12 months - Maryborough and Bingera - amid depressed global prices for sugar.

Mr Pietsch said sugar prices had in recent years fallen to levels that made production unprofitable for farmers and undermined confidence in the sector.

While prices had this year risen to profitable levels of between $450 and $500 a tonne, growers continued to face “great uncertainty” on global markets, most notably the heavy subsidies given to Indian farmers.

A harvester and haul out tractor work together to harvest sugar cane near Mackay.

A formal World Trade Organisation (WTO) dispute has been initiated by sugar producing nations including Australia, Brazil and Guatemala against India, which they accuse of breaching global trade rules through heavy subsidies of their cane farmers.

Mr Pietsch said India now competes with Brazil as the largest sugar producing country and had consistently produced more sugar than its domestic requirements over the past decade.

The build up of large surpluses is a problem for exporters like Australia because the market anticipates that the stock will be exported, meaning global prices are held artificially low.

He said the industry was confident the dispute would soon be resolved, with the WTO coming down on the side of Australian farmers.

He said this year’s improved crop, which would exceed both the 2020 and 2019 seasons, signalled a recovery in industry confidence despite the closure of mills.

But it was important to note that the crop tonnage remained well short of the Queensland industry’s crushing capacity of around 35m tonnes per annum.

“The expected crop result has overcome strong headwinds,” said Mr Pietsch. “It will be the first time in more than 125 years that neither the Bingera mill at Bundaberg or the Maryborough mill will be operating.

Sugarcane grower and farmer Allan Dingle on his farm near Bundaberg in central Queensland. Picture: JAMES WAGSTAFF

“The sugar industry has hung tough and our relative stability comes at a time of great uncertainty around sugar production among producers such as Brazil, India and Thailand.”

Sugar remains Australia’s largest export crop after wheat, with total annual revenues of almost $2bn. Around 95 per cent of the crop is grown in Queensland with 80 per cent exported.

Bundaberg Canegrowers director Allan Dingle said this year’s crop for the sugar city, about 350km north of Brisbane, would be about 100,000 tonnes less than last year due to low rainfall and less land being allocated to growing cane.

Mr Dingle said cane was competing for land in the region with crops such as macadamias, sweet potatoes and vegetable small crops. Over the past 20 years, the amount of land in the Bundaberg region allocated to cane had fallen from 40,000 hectares to about 12,000ha.

He said the closure of the 135-year-old Bingera mill would have an impact on the local harvest with cane having to be transported through the city to the remaining Millaquin mill.

The southern cane growing region in Queensland, including Bundaberg and Maryborough, is expected to produce 2.65m tonnes of cane this year while the Herbert-Burdekin area will produce about 12.35m tonnes. The northern region, including Tableland, Tully and Mossman, and Mackay-Prosperine area will grow about 6.7m and 8.24m tonnes respectively.