CANE fires are once again igniting the night sky as the NSW sugar harvest gets underway.
Broadwater mill began crushing on Tuesday, after 10 days’ hiatus thanks to wet weather.
With an early start from May 31 the Richmond Valley had cut 20,000 tonnes before last week’s flooding brought a halt to the early harvest which is expected to yleld NSW a total of 2.2m tonnes, 900,000t through Broadwater mill.
Prices paid to producers are expected to be significantly up on last year’s $28.50/tonne of cane ($390/t raw sugar) as hedge investors drive prices closer to $35 ($500/t raw sugar).
“The market just keeps rising,” said Sunshine Sugar’s CEO Chris Connors. “We know there is now a world shortage – last season that shortage started.”
“Sugar is heavily traded by hedge funds,” he explained. “There are some shrewd customers out there taking long term positions on this commodity and have been buying sugar since December last year.”
Mr Connors said this year’s global shortfall would be eight million tonnes and that lack of production would spill over into next year when world wide supply was expected to remain three to four million tonnes short.
“There is a lot of activity from hedge funds playing games and pushing the market hard,” said Mr Connors, who estimated the current price push was ‘40 per cent physical reality and 60 pc people trading in the market’.
The move upwards spelt welcome relief for sugar producers, like Broadwater’s Mark Gittoes, who gritted his teeth and battled on through last year’s bumper harvest with payment covering not much more than cost.
But Mr Gittoes said cane was proving good value to the grower when averaged out over time.
Meanwhile Mr Connors said early sugar content in the first weeks of June was higher than expected, perhaps a record, thanks to an especially dry May.
Harwood, which fired up its boilers on Monday evening, is expecting 725 tonnes from the Clarence Valley –with paddocks upstream from Maclean down on tonnage as a result of prolonged summer drought.
The Tweed Valley fared like the Richmond and a near record 570 tonnes will be crushed at Condong.
Total NSW tonnage will be similar to last season but it has been many years since growers recorded such heavy harvests.
Meanwhile, Sunshine Sugar currently sits on a 40,000 tonnes stockpile of raw sugar from previous seasons, and last year sent two 20,000 tonne shipments to Mitsui in Japan through agents Toyota. The co-operative expects to send another export shipment in August or September, said Mr Connors.
