Last of the sweet Australians

Shoring up sugar a priority for NSW Milling Co-operative

Agribusiness
NSW Sugar Milling Co-operative on the Northern Rivers and the private Rocky Point mill on Queensland's Gold Coast are the last Australian players in the cane game. Image Sunshine Sugar.

NSW Sugar Milling Co-operative on the Northern Rivers and the private Rocky Point mill on Queensland's Gold Coast are the last Australian players in the cane game. Image Sunshine Sugar.

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A dry finish to this year's cane harvest on the Northern Rivers has resulted in a lower tonnage but a higher sugar content. Meanwhile Sunshine Sugar is investing in future markets that bring diversity to reliance on world prices.

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A dry finish to this year's cane harvest on the Northern Rivers has resulted in a lower tonnage but a higher commercial cane sugar percentage, which sweetened an ordinary season.

"We are at record high levels for CCS at all three mills, averaging between 12 and 12.3 per cent," said Sunshine Sugar CEO Chris Connors, noting the figure jumped to more than 14pc in early November and to 14.3pc at Condong the week before Christmas.

"Those levels are unheard of. The sugar content makes up for an ordinary crop."

Harwood and Broadwater and Condong mills have now closed for the season, with Condong shutting the door last, simply because good growing conditions in the Tweed Valley meant the crop was still growing, unlike those valleys just top the south.

Total cane tonnage is estimated to be 1.6 million tonnes, well under the 2millt last year. The sugar content from that of 190,000 tonnes is well up on budget.

The NSW Sugar Milling Co-operative, trading as Sunshine Sugar, along with family-owned Rocky Point mill on the Gold Coast, are the last Australian processors left in the business.

As Mr Connors pointed out during the co-op's recent AGM, Mackay Sugar's sale to German company Nordzucker is now complete.

The Isis buyout proposal by Pakistani outfit Almoiz has been approved by growers, who understand the need for investment.

Increased sugar content has offset biomass.

Increased sugar content has offset biomass.

Tully mill is owned by Chinese Cofco, with farmers there fighting with the mill's owners over cane supply conditions. The Dutch company Finasucre owns Bundaberg Sugar. Maryborough Sugar is owned by Thai firm Mitre Phol and Singapore based Wilmar owns the iconic Commonwealth Sugar Refineries, better known as CSR.

For producers supplying those mills, world market price is the only game in town. For growers in NSW, there are options.

Mr Connors says this coming year is hopeful in the sense that Brazilian production of ethanol will be higher than normal at 70 per cent of the crop.

India is dealing with floods and drought and is expected to curtail production from 32millt to 26millt, contributing to a 6millt to 8millt deficit between consumption and production.

Mr Connors says forward expiries are already showing positive trends, with the current ICE price at 12.6 cents a US pound expected to be around 14c/lb in 12 months.

Price per tonne of sugar is now in the low AU$400 with that figure expected to rise to the mid $400s next year.

A minimum sustainable price for the co-op is $470/t with production at least 1.8millt, said Mr Connors.

Producers this year could expect a co-op paycheck averaging $30/t for cane compared to $28/t going to Queensland producers, which is break even money. Cane yield is between 80t/ha and 150t/ha with fertiliser and harvesting costs consuming about half the return.

Meanwhile the refinery at Harwood is operating quite well and adds a reasonable margin, said Mr Connors.

To further enhance producer income Sunshine Sugar is investing in alternative products like plant water, made from condensate harvested during the process of boiling down.

The first truckload from a pilot plant at Condong went out of the shed in early December.

A pilot plant will be built at Harwood to process cane waste, or bagasse into enhanced feed straw.

Sunshine Sugar CEO, Chris Connors said before Christmas that extensive laboratory testing by Sunshine Sugar and Sustinent had confirmed a viable production process for Nutritionally Enhanced Sugarcane Straw (NESS) for use in stockfeed.

"A ready market is awaiting the production of the NESS product as a ruminant stockfeed, along with a proven distribution channel for the fibre supplement as part of a targeted equine feed having been identified," he said.

Driven by the ongoing demand for livestock feed products, Sunshine Sugar, under the guidance of Sustinent, is aiming to set up a large (10,000 tonne) pilot production at their Harwood Mill site, with anticipated product output by September 2020.

A plan to distill rum at the Harwood mill, the location of Australia's first historic batch of the golden serum, is a project two to three year away from completion, with an ability to ramp up production as the market buys in. It is a partnership project under the Holey Dollar label.

These projects come on the back of an already successful low Glycemic Index brand of sugar, with good sales to Malaysia where uptake of the healthy sweetener has been strong.

There are other projects in the pipeline.

"I like them all," said Mr Connors when asked to choose a favourite. "These will deliver good things to the bottom line and will offset low world prices.

"We're turning a loss situation into a positive."

The necessity of keeping prices up for growers is not lost on Mr Connors who understands growers' concerns about future viability, especially with macadamia plantations making a few inroads into coastal cane country.

"We're only here because we have growers," he said.

"At this point we're OK. Growers have done it tough with the drought which will impact next season's crop but this is a crop that can recover."

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