Wet weather means lower returns for cane growers

After a disastrously wet cane harvest, the industry's marketing body, Qld Sugar Limited, says it has been forced to reduce the seasonal pool price.

The company had planned to export 3 million tonnes of sugar this year, but the poor harvest means exports will be down by around a third.

As a consequence the pool price has been dropped from around $475 a tonne IPS to $450, meaning lower returns for growers and millers.

However, John Bird chief operating officer at QSL will says they will still be able to meet all its export contracts, despite the sugar shortage.

"We kept our customers advised of the situation here in Queensland".

Mr Bird says QSL will source sugar from other suppliers, like Thailand and Brazil, and provide that to customers.

He says that's something that happens regularly.

"We've been doing that for a number of years, this year will obviously need to buy a little more in terms of volume".

But he says it doesn't mean a large loss in funds.

"It's not so much a costly exercise".

Sugar price rises

Sugar is once again trading at higher levels.

Three weeks ago the sugar industry was marvelling at the incredible fall of the commodity on the world market.

Sugar fell 20 percent in a matter of days; that's a drop not seen in at least 30 years.

The price has been steadily rising in the weeks since, but on Friday there was a broad based buying of commodities, that sent sugar to even higher levels, along with oil, gold and other agriculture commodities.

Analyst at Kingsman Australia, Matthew Trivet says, there is a chance that sugar will rise above the previous highs of 33 US cents per pound.

"There's definitely the potential for sugar to go back up to that mark, or even a little bit past it".

"The fundamentals within sugar are still very strong".

source: abc.net