Rain sours sugar harvest

WEATHER-hit coal freight lines in central Queensland have reopened but the damage to the state's sugar industry is continuing to mount, with rain predicted over much of the state for the rest of the week.

Queensland Sugar Ltd, which is responsible for more than 90 per cent of Australia's sugar exports, said the extreme rainfall in Queensland this year had been a once-in-a-generation event resulting in nearly one million tonnes of lost sugar revenue.

QSL chief executive and managing director Neil Taylor said the deluge meant sugar exports for this season would fall from about 3& million to 2.2 million tonnes.

"This 800,000 tonnes of lost sugar revenue is devastating for growers, millers and the regional sugar communities, but we are committed to working with industry participants to achieve the best possible outcomes in the circumstances,'' Mr Taylor said.

He said QSL was still receiving sugar to export and all commitments to international customers would be met.

"QSL has successfully managed risks in this volatile market and adverse seasonal conditions and is passing back high returns to the industry,'' Mr Taylor said.

Mr Taylor said that at the request of some rain-affected parts of the industry, QSL also helped fund specialist wet weather harvesting equipment to be brought in, which will help growers harvest their remaining crops.

QSL is still forecasting strong returns for the current seasonal pool of $430 to $480 a tonne, against the record high result of $508.77 a tonne for the 2009-10 seasonal pool.

A QR National spokeswoman yesterday said that all its main lines in the coal systems that had been affected by wet weather, including Blackwater and Goonyella, had now reopened.

On Friday, three mining companies with coal operations in central Queensland said production had been interrupted because of rain. Macarthur Coal declared a force majeure, relieving it from coal delivery obligations to contracted customers, due to production being hampered at its Coppabella and Moorvale mines.

Brazilian miner Vale and its joint venture partner Aquila Resources made a similar declaration in relation to their Isaac Plains mine.

Xstrata and Anglo American have already declared force majeure on some coking-coal contracts because of the rains and Queensland's biggest producer, BHP Billiton, has flagged lower second-quarter production.

source: couriermail