Sugar dispute worth millions

AN ONGOING dispute between Queensland Sugar Limited and its milling companies and canegrowers could reap multi-million dollar benefits for the Maryborough Sugar Factory.

The dispute centres on a recent decision by QSL to hand on a $100 million hedging loss to its mill operators.

Maryborough Sugar chief executive Mike Barry said his company was waiting to see how the dispute panned out, but he predicted the issue could see mill operators turn their backs on QSL and instead sell their raw sugar independently or to the Maryborough company.

Maryborough Sugar Factory handles its own marketing and pricing instead of outsourcing the work to rival marketer QSL and in the past that had been seen by canegrowers as a disadvantage.

Mr Barry said many growers had been upset by the way QSL had handled the $100 million loss.

He said the fact that Maryborough Sugar invited growers to set their own prices, within a set parameter, meant the hedging losses didn't affect those working with the Maryborough business.

Maryborough growers were uncertain about challenging weather conditions last season and were conservative in their pricing.

QSL was more aggressive in its pricing and subsequently had to buy back hedging positions once it became apparent there was a shortfall in the crop.

Mr Barry said there was great potential for growth if mill operators changed their alliance from QSL to Maryborough.

One of the issues the Maryborough factory faced in its recent unsuccessful attempt to take over Tully Sugar was the fact that the business did not outsource its pricing and marketing to QSL.

Mr Barry said that may now be viewed as more of a positive than a negative.

“It's a bit of a free kick for us.”

Mr Barry said the factory was now focusing on completing the Bundaberg acquisition next month, which will see the company become Australia's third largest sugar producer.

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