The Department of Agriculture and Water Resources is forecasting a 3% rise in sugar exports over the current financial year, as a rise in Australian production will meet a projected increase in demand in international markets.
The September quarterly update from the Department’s ABARES division suggests Australian sugar exports will rise to around 4.1 million tonnes (mt) in 2016/17, 3% higher than the volume shipped in 2015/16.
Exports will rise based on a forecast increase to sugar production in Australia, ABARES believes.
“Based on a forecast increase in world sugar prices and export volume, the value of Australian sugar exports is forecast to increase by 21% in 2016/17 to $2.3 billion,” the Department added in its recent report.
“Australian sugar production is forecast to increase by 4% in 2016/17 to 5.1mt. This forecast is largely based on an expected 2% rise in cane production to around 36mt.
“Area planted to cane is estimated to increase by 3% to 393 000 hectares, driven by favourable sugar prices.
“Average cane yields are assumed to be 1% lower, with hot and dry conditions from the El Niño weather pattern in 2015/16 negatively affecting yield potential.”
Major exporter Queensland Sugar Limited is expecting its gross harvest pool return in 2016/17 to rise to $509 per tonne, a 33% increase from the $383 per tonne reported in 2015/16.
“At this forecast value, the pool return is expected to be the highest since 2009/10, when Australian cane growers received $511 a tonne,” ABARES said.
“Based on the current forecast price, the average mill-gate return to Australian cane growers is expected to increase by 19% in 2016/17 to around $50 a tonne of cane cut for crushing.”