On Friday 31 May 2019, Macrossan & Amiet Solicitors held its annual Sugar Pricing Seminar in both Proserpine and Mackay. The seminar across both locations was well attended by our cane farming clients, associated professional advisers and industry-related affiliates.
As in previous years, we were fortunate to have Tom McNeill of Green Pool Commodity Specialists present along with a new presenter, Robert Imray of Farmarco Australia. Tom and Robert gave the audience extensive and up-to-date information regarding sugar cane pricing with international references and translated this to locally relevant information.
Tom provided insight into the international sugar market and explained in great detail the factors currently impacting the sugar price which our cane growing clients are currently receiving. The big discussion points as always were current and future production figures for the sugar crops in India, Brazil and Thailand.
Green Pool Commodity Specialists analysis of the production figures across India, Brazil and Thailand indicate that the global market is slowly transitioning from a global over-supply from the 2018-19 growing season to a likely global deficit in the 2019-20 growing season. Tom explained that if accurate, this deficit will have a beneficial impact on global sugar prices and will translate in the price rising from below cost of production levels up to around 14-16 US cents per pound of sugar.
Tom said that the recent general election in India and uncertainty surrounding the continuation of heavy subsidisation of the sugar cane industrial by the Indian government were big questions for the market. The other unknown was the outcome of Australia, Brazil and Guatemala’s formal complaint to the World Trade Organisation in relation to India’s subsidisation.
Tom reinforced that because of the cyclical nature of the pricing market, growers need to focus on monitoring and improving the efficiency of their production as well as taking an active role in marketing and forward selling their crop to try and maximise outcomes from a pricing perspective.
Tom’s global market update led directly into Robert Imray’s presentation. Robert is the Managing Director of Farmarco Australia, a company which has provided marketing and price risk management services to both sugar growers and sugar millers since 2007.
Robert was able to interpolate Tom’s global pricing and forecasting figures back to a locally relevant presentation directed to our cane farming clients in attendance. Robert explained in detail how to develop an appropriate marketing strategy and the importance of taking into account personal cost of production, average crop yield, foreign exchange rates, and world market price in this formulation.
Robert’s take home message was that an effective marketing strategy needs to by dynamic and marketing decisions need to be made with every effort to remove emotion. It was not enough to just do what has always been done. Those in attendance had glowing feedback about both Robert and Tom’s presentations.
Macrossan & Amiet Solicitors once again extended our thanks and gratitude to Tom and Robert for attending to our events in both Mackay and Proserpine. We are very fortunate to have these experts at our disposal to provide our clients with the most up to date analysis. If you missed this year’s seminar but would like to attend this type of event in the future, please contact our office.