Once in a generation sugar price sets stage for bumper year

Once in a generation sugar price sets stage for bumper year
April 19 2023

Queensland’s 2023 sugarcane crush is just weeks away and once again growers are heading into harvest with a sense of trepidation and optimism. 
CANEGROWERS Chairman Owen Menkens says a recent spike in the world sugar price, coupled with a drop in fertiliser prices, is setting up 2023 as a bumper year for Queensland’s sugarcane industry.
“Just two years ago the sugar price languished below $400 per tonne, not even covering the cost of production for many growers. It was a pretty grim time,” Mr Menkens said.
“Fast-forward to today and that figure has doubled, with the prompt price hitting highs of $804 per tonne in mid-April.
“The last time we saw the prompt price at $800 was in 1980, more than 40 years ago, so growers are understandably excited."
While most growers have already priced their sugar from the 2022 season, and therefore won’t be able to take advantage of the latest high, prices for the coming seasons are equally impressive and continue to rise.
Queensland's cane growers are unique amongst their international peers as the only sugarcane growers in the world who can forward price for seasons to come.
As of mid-April, growers could forward price their 2023 sugar at $756 per tonne and their 2024 sugar at $651 per tonne. 
Adding to growers’ excitement is a fall in fertiliser prices, which had skyrocketed in recently due to the war in Ukraine, all but negating any positive impacts of the surging sugar price.
However, thanks to a recent decline in demand and a drop in natural gas prices, fertiliser prices are falling on the global market.
“These falls haven’t filtered through to the local market yet, as resellers offtake old, highly priced stocks. But if fertiliser prices continue to drop, sugarcane growers should find their input costs significantly reduced when it comes time to fertilise ratoons around August/September,” Mr Menkens said.
With rising sugar prices and falling input costs, just two more pieces of the puzzle need to fall into place to make 2023 a bumper year for Queensland’s sugarcane industry – weather and mill performance.
“Of course, we can’t control the weather, but so far Mother Nature hasn’t been too harsh, with plenty of rain during the growing season and no cyclones.”
Mill performance is a thornier issue, however, and is particularly worrisome for growers, Mr Menken said. 
“A combination of wet weather and poor mill performance in 2022 saw the crushing season blow out by four to six weeks in some districts, with harvesters cutting right through Christmas and well into January.
“An extended season isn’t good for anyone. Growers lose out as the sugar content of their cane declines, making harvesting uneconomical. Unharvested cane also has a negative knock-on effect on future seasons.  
“Mills also lose out, as they produce less sugar but must keep up staffing and maintenance levels. They also have a shorter off-season to carry out vital maintenance and capital works.
“Growers have put in the time, effort, and money over recent months to ensure a good crop is ready for harvest. And we know that mill staff across our districts are working feverishly with local contractors and suppliers to try to meet their maintenance schedules.  
“It is in everybody’s interest to pull together and work towards getting this next crop off in a timely and efficient manner.  
“This industry sees our greatest prosperity when we pull together and, from what I’ve seen from our growers, harvesting crews, and mill staff, I know that is what everyone is striving towards. 
“The success of the coming season hinges on the efforts we put in now. If we can all rise to meet this challenge, and Mother Nature is kind, 2023 can be a fantastic year for Queensland’s sugarcane industry.”