Shaky future for Sugar

  • 23rd May 2019
  • 2018
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Cane farmers must now seriously consider whether they want to continue cultivating cane faced with the continuing low cane prices,” says National Farmers Union general secretary Mahendra Chaudhry.

“FSC announced a shockingly low forecast price of $53.69c a tonne for the 2019 season. This means that the delivery payment will be $32.43c a tonne, well below costs incurred by the farmer to harvest and transport cane to the mills.

The 2019 forecast price is $12.39c lower than that for last year which was $66.08c.  The Delivery Payment this year is $7.32c less than the $39.65c paid last year.

“No cane farmer can survive on such prices. We urge growers to seriously consider diversifying to other cash crops if they want a sustainable livelihood,” Mr Chaudhry said.

The world market price for raw sugar is low and our 2018 season exports fetched the farmer around $63 per tonne which is absolutely unsustainable. This meant that the government was to supplement it by $22 to meet the $85 guaranteed price which it announced before the 2018 general elections.

We are reliably informed that it is now putting pressure on FSC to meet the shortfall. We believe this is what is causing the delay in making the 4th cane payment because FSC is waiting for money from the recent sale of its prime properties to come through to make the payment.

There is also growing concern over weight restrictions placed by FRA and LTA on lorries carting cane. If a suitable solution is not found, the cost of cartage will be prohibitive.

Shortage of cane cutters and the high rates of between $20-$25 per tonne demanded by them is another huge problem for the farmers, considering that some 65% of all cane is harvested manually.

“How can any industry survive in such an environment? The 2019 season is off to a rough start. We don’t see a viable long term future for sugar as things stand,” said Mr Chaudhry.