The shattering of the century-old sugar pool marketing mechanism is a direct result of the Labor and Liberal Governments allowing foreign ownership of vital industries.
The same can be said of the parlous state of the cattle industry where the processing sector is largely controlled by Brazilian interests. How much longer will primary producers allow the ‘farmer’s friend’ namely the National Party get away with allowing foreign ownership of our farms and food processing industries?
Charlie McKillop, Suzannah Baker and Craig Zonca
It’s a case of another day, and another major foreign-owned milling company pulling out of Queensland’s century-old sugar export pool.
Tully Sugar, under the ownership of the Chinese state-controlled COFCO group, has announced it will follow the lead of Wilmar and MFS Sugar in cutting ties with Queensland Sugar Limited (QSL) in 2017.
Industry lobby group Canegrowers has described the move as a ‘shattering blow’.
“It is a major body blow to our aspirations to hold together the single-desk,” said Canegrowers chairman Paul Schembri.
“It’s another example of milling multi-nationals who have snubbed their noses at Australian cane farmers,” Mr Schembri said.
“After all, those farmers have real sweat, real skin and real risk in this game.”
But Tully Sugar CEO Alick Osborne defends the move.
“We will be trying to provide services to growers that give them the choice of different products, and potentially different providers of those products, to be able to price their sugar effectively.
“We’ve made the difficult decision [because of] the uncertainty surrounding the future of QSL.”
Mr Osborne says he is confident that COFCO can offer growers competitive finance.
“They already market large volumes of sugar through offices in Hong Kong and in Beijing so we have the ability to tap into that network.
“We will absolutely make sure that our growers continue to have access to world market prices.”
Time for government action
Paul Schembri is unconvinced and wants the Federal and State governments to intervene.
“We believe there’s a commercial imbalance.
“We need to right a wrong and we need government involvement to sort this out,” Mr Schembri said.
Only a week ago, Canegrowers, millers and QSL attended a so-called ‘crisis meeting’ organised by the Queensland Agriculture Minister John McVeigh.
Mr Schembri is now calling on Mr McVeigh to take legislative action, rather than seeing the Minister become the ‘marriage counsellor’ for the industry.
“It could well be legislation that ensures growers have a right to a formal say about QSL and that grower economic interest is represented.”
“The mills might well be relying on a legal standing but I’d say this; ‘they don’t enjoy the support of growers’.”
Mackay Sugar says it will stick with QSL
Mackay Sugar is standing by its commitment to Queensland Sugar Limited (QSL) but has a ‘fallback plan’ which involves marketing sugar through a foreign owned co-operative.
Despite the ‘trend’ of the bigger millers pulling out their sugar, Mackay Sugar CEO Quinton Hildebrand says he’s convinced QSL remains the best option for the entire industry.
“We’re going to stay within QSL, we support the QSL model and on the strength of that we believe it serves our best interests to stay and give it the best chance that we can,” Mr Hildebrand said.
“We can push for our number one prize which would be an industry solution supporting QSL, we think it’s better not to fragment the industry.”
However, the miller is taking an each-way bet in the marketing game.
Earlier this year, Mackay Sugar joined with Brazilian sugar giant, Copersucar, to create a marketing arm which will sell the mill’s economic interest of sugar from 2017.
“We’re very fortunate to have a ‘first prize’ [staying with QSL] and then a fallback position, so that’s why we’re confident,” Mr Hildebrand said.
“We’ll be aligned with the world’s biggest marketer of sugar [Copersucar] and we’ll be in a strong position.”
Mackay Sugar will sell its one third share of sugar through the arrangement, and could possibly sell growers’ two thirds if QSL isn’t viable.
“If the industry is fragmented due to the actions of others we’re in a good position to compete with them on the world market [because of deal].”