Frustration and disappointment as negotiations flounder
Sugarcane grower organisation CANEGROWERS is bitterly disappointed that negotiations between Wilmar Sugar and QSL have reached an impasse serving to frustrate the implementation of competition in sugar marketing.
“The situation is now urgent for growers who are unable to price sugar for 2017 or make future investment decisions with confidence,” CANEGROWERS CEO Dan Galligan said.
An On-Supply Agreement (OSA) between a miller and any company offering sugar marketing services, such as QSL, is critical to allow growers to choose a marketing agent for their sugar. It is also an important component of being able to secure a Cane Supply Agreement (CSA) between a miller and growers.
“Growers need to have confidence that they are being presented with competitive marketing options when they sign a CSA with their miller,” Mr Galligan said. “We had the reasonable expectation that an agreement would be achievable between Wilmar and QSL.”
CANEGROWERS calls on QSL and Wilmar to give grower negotiating teams access to details of the terms under which they could cooperate to facilitate marketing choice and to go back to the table to find common ground.
“While the On-Supply Agreement is a commercial instrument between Wilmar and QSL, it is also an integral part of a successful outcome to CSA negotiations with growers. Growers have a strong commercial interest in the terms and conditions it contains,” Mr Galligan said.
“We acknowledge that QSL did make public its standard OSA terms in May.
“We welcome the concession from Wilmar that it would agree to transfer the title to nominated sugar to the growers’ preferred marketer free-in-store at the bulk sugar terminal, clearing up one major concern with the broad approach Wilmar is pursuing.
“The veil of secrecy around the Wilmar-QSL discussions needs to be lifted. Wilmar now needs to release to growers the full terms under which they are asking QSL, and other sugar marketers, to operate.”