AGRICULTURE:
Mandate ethanol or sugar industry faces collapse

by News Weekly

News Weekly, November 1, 2003
Unless urgent steps are taken by the Federal Government to mandate ethanol, and convert from sugar production into higher value added ethanol, then the sugar cane industry faces collapse.

The prolonged drought, low world prices as Brazil expands production by one-Australian sugar industry per year, and the rising Australian dollar are adding to seven bad years in the industry.

In the 1990s, farmers were receiving $390/tonne for sugar from their cane. They need at least $300/tonne to be marginally profitable.

Predictions by valuers Herron Tood White are that by December, the global spot price for sugar will be $181/tonne; by March next year $174/tonne; and by next June $169/tonne.

At current prices, Australian farmers are receiving below 6c/lb for sugar, while American subsidies ensure that their farmers receive 28c/lb.