Sugar prices set to drop due to surplus

Canegrowers chief executive Steve Greenwood
Canegrowers chief executive Steve Greenwood Bernard Milford

THE international price of sugar is set to fall in the next year, as the world enjoys a sugar surplus and China slows down its imports.

A report released this month by the Commonwealth Bank's Global Markets Research found there was six million tonnes of excess sugar in the global market, meaning supply was well ahead of demand.

Canegrowers chief executive Steve Greenwood said he expected sugar prices to remain at about US19c per pound because it was roughly the cost of production.

Although this was lower than the US26c per pound sugar growers were scoring enough to "make a reasonable living".

"There is still money to be made," Mr Greenwood said.

"That being said, our input costs are increasing year-on-year, fertiliser costs are increasing and fuel costs are increasing."

The Federal Government's carbon tax was making life hard as growers coughed up to pay costs not levied on the industry's top competitors in Thailand and Brazil.

However, Mr Greenwood was optimistic about the industry recovering from years of flooding rains and cyclonic destruction.

This year's crop was far stronger than its predecessors in 2011 and particularly 2010 which he described as "the worst crop we have had for many years".

This recovery was buoyed further by industry investment from overseas which Mr Greenwood said was "in a great place", even if prices had fallen somewhat.

Topics:  canegrowers china sugar

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