Sugar costs less to grow in Australia

8 May 1998

Sugar costs less to grow in Australia

BEET growing in Britain had a harsh reminder of the reality of global sugar production recently when a group of Australian cane sugar growers visited farmers weeklys Easton Lodge farm at Stamford, Lincs.

"We can grow, process and deliver sugar to UK customers for half the price UK farmers are getting today," claims Australian cane farmer Ross Walker.

As deputy chairman of the Australian Cane Farmers Associa-tion and a grower of 80ha (200 acres) of cane near McKay, Queensland, he should know. Together with 18 other Australian cane growers he is touring Europe to see how sugar is produced here.

Cane variable costs are typically £780/ha in Queensland, not far short of last years £807/ha at Easton Lodge. But yields differ greatly. An average cane crop produces 13.5t/ha of pure sugar compared to just 8.5t/ha from Easton Lodges sugar beet.

The difference is crucial. Australian growers are paid for their cane at a rate based on the world market price for sugar. That world price is currently quoted at 11 US cents/lb, equivalent to £150/t of pure sugar. By contrast UK sugar is currently supported at an intervention price of about £450/t.

"We are happy with 11 US cents," says Mr Walker. "We like to see the price at 10-14 cents/lb. Below 10 cents we start to feel the pinch, above 14 it starts to attract too many inefficient producers."

With 4.1m tonnes of Australias 5m tonnes of sugar exported, growers are keen to see the European market deregulated. But Mr Walker appreciates the UK farmers position. "If you can persuade the public and politicians to support the industry at this level then I say good luck to the farmers. We get no public support."

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