Sweet and sour times for sugar growers

AUSTRALIA'S sugar industry looks set to further benefit from surging sugar prices, which are at near 30-year highs as demand continues to outstrip supply.

But it's not all upside for cane farmers, who are grappling with a stronger currency and are likely to see input costs increase in 2010.

The Australian Financial Review reports tight export availability and continued demand in the first quarter of 2010 are keeping pressure on the sugar price.

In 2009, there was a global sugar deficit of about 11 million tonnes. The expectation is that global demand will continue to outstrip supply, and the sugar deficit for 2010 will be between 3 million and 5 million tonnes.

Australian cane production was down in 2009 due to flooding in North Queensland, which produces nearly all the nation's sugar. Land was used for other crops and a late harvest finish in 2008 also hurt production numbers. At just on 30 million tonnes, the Australian cane crop was the lowest since 1994.

source: farmonline