For the first time in years, Australia’s sugar farmers are optimistic about their future with world prices pushing the industry back into the black and new streams of income becoming available.
Story By Ken Eastwood
Life for Australia’s 4500 cane-growing farms is looking pretty sweet. For the first time in at least a decade, the world sugar price looks like it’ll generate decent returns for the next few years. Farmers are adopting world-best practices, researchers seem to be keeping up with the latest threats to the crops, a cheaper fertiliser supplier has just come on the market from New Zealand, and more and more varied income streams are becoming available. And new sugar products were released earlier this year, including a low GI sugar.
“It’s the first time in many years that there’s this sense of optimism,” says Frikkie Botha, executive director of the Sugar Research and Development Corporation. “You can just feel the positive vibe out there at the moment. The sugar price is probably the best price we’ll ever have.”
CEO of Australian Canegrowers Association and Queensland Canegrowers, Ian Ballantyne, almost chortles with glee. “While this crop itself won’t be a great one, because of flooding, the outlook is great for the next few years,” he says. “During the ’90s we saw sugar prices around $350 a tonne. For the majority of this decade though it was $250–300 a tonne. We’re now looking at a period of $400–450. We have been a loss-making industry, now we’re looking at a period in the black.”
Three years ago, an Australian Bureau of Agricultural and Resource Economics study found cane growers were making $2–14.50 per tonne of cane. “A good grower at the moment should be able to take about $15 a tonne for cane,” Ian says.
Most Aussie cane growers – spread up the east coast from Grafton in northern New South Wales to Mossman in Far North Queensland – have relatively small holdings, ranging from 30 to 250 hectares and averaging about 80ha. Their average yield is around 100 tonnes per hectare. “On a good day, downhill with the wind behind us, we produce 35 million tonnes a year,” Ian says. When processed this equals about 4.75 million tonnes of sugar, generating around $2 billion.
The sweet-tooths of the world ensure that 80 percent is exported, making sugar Australia’s second-largest export crop (after wheat), and raking in $1.2 billion from countries as widespread as Japan, Korea, Canada, Saudi Arabia and New Zealand.
This story excerpt is from Issue #66
Outback Magazine: Aug/Sep 2009