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OUTLOOK 2007 6 March 2007 |
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| Sugar prices to fall |
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| Despite rising ethanol demand and production, and export limiting reforms to the EU sugar industry, sugar prices in real (2006-07 dollars) are projected to decline over the majority of the OUTLOOK period, OUTLOOK conference delegates heard today. "The world indicator price for sugar (New York no.11 raw spot fob Caribbean) is forecast to fall by 17 per cent to average US9.5c/lb in 2007-08," Dr Terry Sheales, Chief Commodity Analyst, ABARE, further told the conference. After 2009-10, prices are expected to recover slightly as consumption surpasses production and stocks begin to fall. "EU sugar production is currently undergoing a significant period of contraction to prevent an excessive buildup of stocks as they comply with a WTO panel ruling to limit exports of subsidised sugar to 1.4 million tonnes of sugar a year," said Dr Sheales. He added that there is potential for the European Union to become a large importer of sugar, with imports of up to 4 million tonnes a year possible by 2011-12. Keith DeLacy, Chairman of Queensland Sugar Limited discussed some of the political challenges posed by free trade agreements. "Congress is paying billions in subsidies to get Americans to use more ethanol while keeping in place tariffs and quotas that guarantee they will use less." "The real power of trade is that it encourages specialisation, expansion into areas of comparative advantage, and corresponding gains in productivity that raises incomes," Mr DeLacy said, speaking on the benefits of free trade. Alan Munro, sugar producer from the lower Clarence River in New South Wales, advised conference delegates on improved production techniques and implementation. "Controlled traffic and wider row spacings, direct drill and zero tillage, and crop rotation incorporating legumes are all viable options that could be used to improve productivity in sugar cane farming," Mr Munro said, having used these methods on his cane farm. |
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| Copies of available speakers' presentation and papers are available at ABARE's OUTLOOK website, OUTLOOK 2007 or phone 02 6272 2010. For general media enquiries, contact Maree Finnegan, Media Coordinator on 02 6272 2260 or email mfinnegan@abare.gov.au. |
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