CANEGROWERS MEDIA RELEASE

14 April 2011: Overdue concession by Sucrogen a few lumps short: dispute ongoing

CANEGROWERS has come out today saying that while the concession made by Sucrogen is a small breakthrough, the peak group has reinforced that it is only what cane growers are entitled to and in fact still falls short of the mark. CANEGROWERS says it will continue to hammer hard with the mill to play fair and come up with a more equitable loss-sharing solution.

After months of pressure exerted by CANEGROWERS, Sucrogen mills have advised growers that they will be asked to pay a slightly smaller proportion of Sucrogen’s $60.86M share of the QSL extraordinary losses incurred at the end of the disastrous 2010 season, which has left a big hole in the industry’s export income - a liability which is now the subject of much dispute within the industry.

Cash-strapped growers who have been anxious about their financial situation for months, will now have the option to access much needed cash-flow, which had dried up when QSL suffered its losses. Sugarcane growers have been doing it tough - in the last six months they have seen off the worst harvesting season on record and are looking down the barrel of another lower production season.

CANEGROWERS Chairman, Alf Cristaudo said that while Sucrogen has claimed the concession is their own initiative and is at their expense; this is not correct and only happened as a result of CANEGROWERS demands for a fair-go for growers.

“The actions of Sucrogen in delaying access to QSL loans has put growers’ businesses in jeopardy. CANEGROWERS primary focus throughout this debacle has been to get cash flow to growers along with achieving a fair and equitable outcome in the amount that growers should share,” he says.

Growers remain in dispute as to the quantum. “If the growers have a liability to meet a share of the cost, then it would not be fair, reasonable or equitable for the full $47.69 deduction to be applied across every tonne of cane as originally proposed by Sucrogen,” says Cristaudo.

It has been determined that the extraordinary losses will be passed through QSL’s shared pool, and thereby all QSL supplier mills will see a reduction in each pool price. In Sucrogen’s case this is $47.69 per tonne IPS.

According to CANEGROWERS, Sucrogen has delivered sugar into the domestic market and that sugar delivered by the growers is paid at the equivalent QSL price. In Sucrogen’s case, 89% of cane delivered to the milling group has gone to produce export sugar. “In this extraordinary situation the deduction should not apply across every tonne of cane produced by Sucrogen’s growers. In an equitable system, any deduction should only reflect the growers’ rightful share of the losses on the export component of the crop,” says Cristaudo.

Alf Cristaudo says that CANEGROWERS has negotiated far better terms for the loan document following protracted intervention measures. “This win means that growers wishing to avail themselves of the QSL funded loan offer now have the opportunity to access cash flow by way of the QSL loans,” he says.

CANEGROWERS says that where growers have concerns about the allocation of extraordinary losses and wish to take legal issue with Sucrogen, the loan offer document does not preclude such action, as publically admitted by Sucrogen staff.

Media Comment:

For more information:  Suzi Moore, CANEGROWERS Communications 0427 641 239