As the sugarcane crush winds down across Queensland, the industry is facing a challenging period driven by a steep fall in global sugar prices.
Over the past six months, the world price for sugar has dropped by more than 30 per cent and now sits below the cost of production. For many industries that would be worrying enough, but for sugar this has wide-reaching consequences far beyond the farm gate.
Sugar is the economic backbone of dozens of regional communities. It supports thousands of family farms, employs tens of thousands of people across harvesting, milling and transport, and underpins countless small businesses from machinery dealers and fuel suppliers to cafés, accommodation providers and local retail stores. When cane growers tighten their belts, regional economies feel it.
What makes the current situation difficult is the timing. Most sugar is delivered at this stage of the season, so growers’ income is heavily tied to today’s low price. Understandably, many are asking how this dramatic fall has occurred.
On the surface, it defies the usual logic of supply and demand. The global sugar balance is expected to be in deficit for the 2025 production year, which would ordinarily push prices higher as buyers compete for limited supply. The complication comes from the expectation of a large surplus in 2026, with forecasts of increased production from Brazil, India, Thailand and Europe. Some buyers appear to be waiting until that extra sugar arrives.
Even so, those fundamentals do not fully explain the scale of the fall. Much of the movement has been driven by financial markets, where speculative traders have pushed prices sharply downward. Speculation can drive prices up just as dramatically, as it did last year when it helped push values beyond $900 a tonne. Predicting what comes next is extremely difficult, even for experienced analysts.
What we do know is that global markets eventually correct when prices sit below production costs for long enough. Supply will contract and prices will lift. Until then, growers, contractors, communities and businesses connected to the industry will need to prepare for a tougher period.
The industry has weathered difficult cycles before and remains resilient. When prices turn, Queensland growers will be ready.
