FROM THE CHAIR By Paul Schembri, Chairman CANEGROWERS
2020 HARVEST INCHING TO A CLOSE The 2020 cane harvest is coming to a close and should be completed by mid-December. As an industry we are reliant on every tonne so I'm hoping the weather holds and all growers get their crop to the mill. At this stage, we are looking at an Australian crop totalling 31 million tonnes, made up of 29 million tonnes in Queensland and 2 million tonnes in New South Wales. This should equate to around 4.2 million tonnes of raw sugar production – slightly up on last year! CHINA TRADE There has been considerable media coverage of late on Australia’s somewhat fraught relationship with China and the impact this may have on trade, particularly the export of Australian agricultural products to China.
Certainly, China presents a huge market opportunity. It is one of the top three importers of sugar in the world, with a population of over 1 billion people.
is why Australia, Brazil and Guatemala have taken an action at the World Trade Organisation, alleging that these subsidies are contrary to WTO rules.
Added to that is our proximity to Asia, which positions us far more competitively than other sugar exporting countries.
I am pleased to advise that while the COVID-19 pandemic had initially delayed the formal hearing, the WTO panel hearing this dispute has advised that it will be held very soon.
So, while any contraction of access to the Chinese market wouldn’t be life threatening to our industry, this market is one we are hopeful can be a bigger part of our future export program.
A number of media outlets have reported that Chinese authorities are advising against imports of certain products, including sugar.
There’s a saying in world trade that, 'Markets are hard won but easily lost'. That is why we are viewing the developments in China with a great deal of concern.
Australian sugar exports to China ebb and flow, and last year accounted for just 8% of our export tonnage.
To date, despite what has been reported, we have no evidence that Australian sugar exports are unwelcome in China.
Whilst China is an important market, our export market diversity ensures we are not exposed to risk by reliance on any single market.
WTO ACTION
The Australian sugar industry has pursued a deliberate strategy of accessing and maintaining as many markets as possible. Access to multiple markets ensures our sugar, when sold, captures the best possible premiums.
For the Australian sugar industry, the global price is the benchmark that we live and die on. There is no other sugar industry in the world so highly reliant on the world price. There is no doubt that the current underlying weakness of the world price is due to Indian export subsidies, which
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This means that the WTO dispute against Indian is back on track. We are confident that a decision will be handed down in early 2021. This is a long and bureaucratic process; however, we are now in sight of an initial decision. While we acknowledge that appeal processes apply after a decision is handed down, from experience, the initial decision is the landmark event. 2020 will long be remembered as one of the most challenging years we have ever faced. Let’s hope that 2021 is a better year for the Australian sugar industry. I'd like to take this opportunity to wish you and your family compliments of this Christmas season and a safe, productive and prosperous New Year.
