Promising 2022 Crush Prospects
Sugar millers are anxiously monitoring the sugarcane crop available for harvest in the upcoming 2022 crushing season, starting late May. Earlier flooding in the southern region of Queensland and in Northern New south Wales has raised concerns about the size and quality of the crop that could be available for processing this year in those areas. All three of the NSW mills were flooded and are still being repaired as are the cogeneration plants. At this stage, it appears likely that Queensland’s 2022 sugarcane crop will deliver as much as 30.5 mln tonnes, up from 28.5 mln tonnes crushed in 2021. New South Wales is anticipated to see a moderate decline in cane availability, down from 1.6 mln tonnes to 1.3 mln tonnes. This suggests an overall rise in Australia’s sugar cane crop of 5.6 % from 30.1 mln tonnes (from which the sugar milling sector manufactured close to 4 mln tonnes of sugar) to 31.8 mln tonnes in 2022, with a potential sugar output of around 4.3 mln tonnes.
Government Funds Trade Policy and Market Access Strategy
With a continuing focus on export raw sugar, the Australian sugar industry has welcomed a decision of the Australian Government to support the first phase of the industry’s Five-year Trade Policy and Market Access (TP&MA) strategy.
The strategy is the culmination of multiple years’ analysis and discussion across industry stakeholder groups.
It has nine action plans and five broad objectives which are:
• Achieve a fairer global playing field free of export subsidies, and trade distorting domestic price supports;
• Maximise export revenues by focussing on the highest-returning global markets;
• Look ‘over-the horizon’ to identify potential new global growth markets;
• Address a number of technical barriers to trade; and
• Better understand the environmental requirements of global customers.
Successful implementation of the strategy will lead to a diversification of export markets, with increased industry returns.
The AUD592,900 grant, provided under the Agricultural Trade & Market Access Cooperation program, will fund four action plans and the first year of the Strategy’s implementation. The four plans relate to the recent win against India at the World Trade Organisation; meeting environmental requirements for accessing global markets; identifying new markets and improving procedures when exporting to Japan.
Industry Roadmap to 2040
Meanwhile the industry is putting the finishing touches on a whole-of-industry shared vision and roadmap to 2040. The Sugarcane Industry Roadmap will identify significant opportunities to drive sustainability, growth and prosperity of the industry and regional communities into the future.
The roadmap will identify the future forces likely to impact the industry, establish agreed priorities and provide insight into the skills, resources, innovation and infrastructure needed for future success. In short, the industry recognises the need to complement and enhance the traditional raw sugar production model to improve productivity and diversify revenue sources by developing a ‘sugar plus’ industry with potential for alternate markets such as biofuels and bioplastics.
In developing the roadmap the ASMC released its Target 34 paper. The paper outlines the importance of achieving 34 mln tonnes (T34) of consistent Queensland cane supply per annum, a potential pathway, and a number of commercial and public reform suggestions to get there. Flat cane yields and falling cane area is causing reduced cane supply growth which in turn is creating greater mill capacity under-utilisation. Coupled with a lack of revenue diversification, Queensland sugar industry operations will continue to be placed under financial stress if left unaddressed.