From the Chair

BY OWEN MENKENS,
Chairman, CANEGROWERS

The new year is upon us, and it is a good time for reflection as well as looking to the year ahead.

At the time of writing, it looks as though Plane Creek plans to continue crushing beyond Christmas which is very difficult for the growers involved. My heart goes out to those growers, contractors and mill workers who were asked to work over the Christmas period. Mill performance remains the biggest issue facing the central and Rocky Point areas. Hopefully the mills can invest wisely in their operations to prevent a loss of staff and reduced productivity in the crop produced over coming years.

2023 was certainly a challenging year for our industry with the STL insourcing decision happening early in the year, the sudden crash in the world price being the significant story at the end of the year trumped only by the devastation we saw from the flooding in far north Queensland. We also saw some extremely wet conditions in most areas mid-year, which created issues for the crush as well as planting.

The crop was much smaller mainly due to the late finish from the previous year and it is this trend that must be halted. A crop of under 29 million tonnes for Queensland is a long way short of where we should be as an industry. Luckily CCS levels were a lot higher, which helped maintain the overall sugar production. But in reality it is a lost opportunity when we consider the high sugar price on offer through the year.

The 2023 sugar price surged above $600 in January and continued to strengthen through the year reaching $953 in October. The forward prices also surged reaching $845 for 2024 and $735 for 2025. These prices were unprecedented and certainly gave the industry confidence going forward.

The main reason behind the surge was a deficit in the world market with lower crops in India, Thailand and Europe as well as pressure on Brazilian exports. Speculators also joined the party, pushing the spot price ever-higher. Many were saying that $1,000 may be around the corner. In early December though, the speculators left the market which resulted in a 6c drop in the world price and the 23-price falling to $722 at time of writing. This was based on drier conditions in Brazil allowing them to export more than anticipated and the Indian Government restricting the use of sugar juice in their ethanol program.

Growers should not panic though as the fundamental reasons for the surge are still there. There is still a world deficit and India’s ethanol industry continues to soak up their sugar exports and the Thai crop is still below average. Speculators can be our friends as well as our enemies in the world market and we witnessed that this year.

Hopefully we can have a better year in 2024 with a bigger crop and good prices. I look forward to the year ahead with its interesting challenges as well as some possible opportunities. I encourage all growers to log onto the member portal during this quieter period. You will need your member number provided with this magazine. The portal includes market updates as well as many other practical tools to help your farming business.