Macrossan & Amiet Solicitors have once again been very fortunate to have Tom McNeill from Green Pool Commodities travel to Mackay and Proserpine for our annual Sugar Pricing Seminar for cane growing clients and industry-affiliates.
As in the previous two years, it was invaluable for those in attendance to hear from Tom regarding the up to date information in relation to the Sugar Industry in particular sugar pricing.
Tom gave a current insight into the current Global Sugar Industry and the numerous factors affecting the global market and impacting on the sugar price which our cane growing clients are currently receiving. For example, Tom said that there is a large predicted sugar production surplus in India for the 2018-2019 season which will continue to have a negative impact on the world sugar price.
Tom discussed at length about the global average cost of production and said that, in his opinion, the Australian Sugar Industry was one of the most cost-efficient industries worldwide. In his opinion when you take into account not just the cost of growing and the production of sugar but also its transportation and storage infrastructure at the Port, Australia has a competitive advantage when compared with other global producers.
Tom explained that although in Brazil the cost of growing the sugar cane was less than the cost in Australia, when you took into account the costs of producing the sugar and, more importantly, transporting it from the sugar mill to the Port, Australia’s average cost of production was cheaper. Tom explained that in some parts of Brazil the sugar must be transported in excess of 400 kilometres to the Port and that a recent national truckers strike had caused localised chaos and also a temporary rally of the world sugar price.
Tom spoke about the subsidies being paid by governments in different countries, including the EU, to their sugar cane producers and the effect that this has on world sugar price.
Tom said that despite the recent rally in the world sugar price as a result of the Brazilian trucking dispute the increase would be short lived. At the time of penning this article that prediction has unfortunately been accurate and the sugar price has dropped again.
Tom thought that overall, we were in for another year of low prices before the price cycle again would start to pick up, consistent with his previous assessments that the global market was still oversupplied and that the market was still transitioning from its surplus phase.
Tom’s take home message to all cane growers and associates present was that the sugar price is cyclical. Growers must not only be efficient in the production of their crops, but they also need to take an active role in marketing and forward selling their crop to try and maximise outcomes from a pricing perspective.
Macrossan & Amiet Solicitors once again extended our thanks and gratitude to Tom for attending our events in both Mackay and Proserpine. We are very fortunate that Tom is willing to give up his time to make these presentations as he clearly has a fantastic knowledge of the sugar industry, not only in Australia, but more importantly worldwide.
If you missed this year’s seminar but would like to attend this type of event in the future, please contact our office.