About the Industry
Sugarcane is an important industry for the australian economy
Growing of sugarcane for processing into raw sugar is one of Australia’s largest and most important rural industries.
Australia is a low-cost producer and major exporter, with the capacity to produce more than 4.75 million tonnes (mt) of sugar annually. Depending on prices, the industry generates direct revenue of around $1.5 - $2 billion, including $1.2 billion in exports. The flow on to the regions increases these numbers many times over.
Around 98% of Autralia's production is exposed to the world market price. It has no tariff protection for the 20% of its output sold on the domestic market.
Internationally competitive
The industry's focus is squarely on international competitiveness. Because most sugar is exported and there is no domestic support price or subsidies. Success has been built on world's best practice in production, handling and marketing and a reputation for quality, supply reliability and service. At the farm gate, Australia has maintained export competitiveness by adopting innovative practices, particularly through mechanisation, new farming practices and diversification.
Queensland's capacity to store over two million tonnes of sugar in a network of bulk port terminals allows it to supply customers throughout the year. Major customers include Japan, Korea, Malaysia, New Zealand, Canada and the USA.
Australia is one of the lowest cost sugarcane and raw sugar producers in the world. Australian cane growers are world renowned as efficient, innovative producers who have demonstrated a capacity to respond to changing conditions. The productivity on their farms is among the highest in the world. Cost efficiencies have been achieved largely through mechanization and adoption of innovative practices.
Queensland sugarcane is primarily grown for processing into raw sugar, which is sold directly to refineries, not through trade houses.
Exports
Virtually all of Australia’s exports come from Queensland, which exports around 80% of its output. Queensland raw sugar is sold to final users on a cost, insurance and freight (cif) basis.
Although there are larger producers, Australia is one of the world’s second largest exporters of raw sugar. In 2005 season it produced around 5 million tonnes of raw sugar, the majority of which was exported. Industry income exceeded $1.5 billion.
Major export customers include Japan, Korea, Malaysia, Saudi Arabia, New Zealand, Canada, USA and Taiwan.
Pricing & Marketing Sugar
Up until 2006, Australia enjoyed a ‘single desk’ arrangement where all sugar was compulsorily acquired by sugar marketer, Queensland Sugar Ltd. This was degregulated on January 1, however the majority of growers retain group marketing arrangements with QSL, which uses the bulk marketing power to leverage better deals for Australian sugar on the international market.
The sugar industries in Queensland, NSW and Western Australia manage their own marketing arrangements. NSW production is sold mainly on the domestic market while Ord sugar is exported to Indonesia.
Australia has no domestic support price, unlike most other countries which regulate prices, often far above world market values. Its success has been built on world’s best practice in production, handling and marketing. Many of the world’s major sugar importers prefer to source their requirements from Queensland because of its reputation for quality, innovation, reliability and service. The industry’s high market share and long-standing customer relationships reflect its efficiency, reliability and cost competitiveness.
Milling & transport
Around 4500 business enterprises around Australia supply more than 35 mt of cane to 27 sugar mills. Most mills crush an average 10,000 tonnes of cane daily and employ around 150 people during the season. Cane is transported to the mills on cane railway and road systems. Millers, growers and harvesters determine harvesting and transport schedules that ensure cane is crushed as fresh as possible. Average cut to crush time is less than 12 hours.
Most sugar mills have been established for more than 100 years although the small mill in the Ord River area only began crushing cane in 1995. The juice mill that began operating near Mareeba in 1998 was Queensland’s first new mill in 73 years.
Industry bodies
CANEGROWERS, the Australian Sugar Milling Council, BSES Limited (which conducts research into the sugar industry) and Queensland Sugar Ltd (which markets Queensland’s sugar), are generally recognised as comprising the Queensland Sugar Industry.
Where it is grown
Cane growing and sugar production underpins the economic stability of many coastal communities.
Most of Australia’s sugarcane is grown in high-rainfall areas along the coastal plains and river valleys on 2100 km of the eastern coastline between Mossman in Far North Queensland and Grafton, NSW. Cane growing and sugar production is one of the most important agricultural industries in the State of Queensland accounts for about 94% of Australia’s raw sugar production. Nearly 5% is produced in Northern New South Wales and the remainder in Western Australia’s Ord River Irrigation Area. Click here to see a map of sugar areas in Queensland
Australian cane farmers
Australia has approximately 6000 cane growers who are part of around 4500 cane farming business operations.
There are around 500 cane farming operations in New South Wales and 18 in the Ord River area of Western Australia. The vast majority, 4000 cane farming business, operate in Queensland, accounting for around 94% of cane produced in Australia.
The vast majority of cane farms are owned by sole proprietors or family partnerships. It is estimated that sugar milling companies own less than 2.5% of the total cane area.
Average farm size is 77 hectares but farms range from 30 to more than 250 hectares. Average yield is 98.9 t/ha of cane.
All sugarcane in Australia has been harvested mechanically since 1979 and all sugar handled in bulk since 1964.
Some 382 600 hectares of land was harvested in Queensland in 2005. This comprised 141,068 ha in the region from Herbert north, 74,000 ha in the Burdekin, 114,880 ha in the central region encompassing Proserpine, Mackay and Plane Creek, and 52,661 ha in the southern region (mainly around Bundaberg, Childers and Maryborough).
Australian cane growers are world renowned as efficient, innovative producers who have demonstrated a capacity to respond to changing conditions. The productivity on their farms is among the highest in the world. Cost efficiencies have been achieved largely through mechanization and adoption of innovative practices.
In recent years growers have sought to maintain viability and world competitiveness in an increasingly tougher export market environment by adopting new farming practices which are more profitable and sustainable. There has been a steady trend towards larger farms and less dependence on labour.
Marketing sugar worldwide
The world has a sweet tooth!
International sugar market analyst Czarnikow Sugar has estimated that global sugar production in 2006-07 will be 153 million tonnes and world sugar consumption 151.2 million tonnes (any difference comes from stocks).
Nearly 70% of that sugar mountain will come from sugarcane and the balance from sugar beet. Australia is expected to produce around 5 million tonnes in 2005-06 season with exports worth $1.5-2 billion.
Australia was a net importer of sugar until 1924 but is now one of the world’s largest exporters of raw sugar. It has an enviable reputation as a reliable supplier of high-quality sugar and has developed consistent markets for sugar, even in times of world over supply.
Principal export markets include Japan, Korea, Malaysia, New Zealand, Canada, the USA and the Middle East.
Queensland Sugar Limited markets all of Queensland’s raw sugar production. It administers pool price arrangements, manages the industry’s seven bulk sugar terminals, and manages sugar price and foreign exchange exposure to optimise returns to growers and millers.
World sugar production has undergone massive changes since 1970, particularly the emergence of Brazil as a dominant force, the growth of the European Union as a subsidised producer, the growth of Thailand and the decline of Cuba.
Although the Australian industry developed under a regulated system which sought to match production with assured markets, it is now one of the least protected sugar producers in the world.
