Harvest Update for the Australian Sugar Industry
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Harvest Update for
the
Australian Sugar Industry
Fortnight Ending 16th June 2019
Editor: Lindsay Jolly
WE KNOW SUGAR CONSULTING
21ST JUNE 2019 WKS 1
AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Overview
The cane crushing season commenced early June, but was marred by wet weather. The Australian Sugar Milling
Council (ASMC) reported on June 13 that there have been disruptions to the start of the season at virtually all
mills scheduled to be crushing. Wet weather has been a key contributor along with IT and plant commissioning
challenges. They had been advised of deferred start dates in the Herbert, South Johnstone and Mulgrave areas
while Tully had stopped for several days waiting for better weather conditions. Cane crushed in the first fortnight
of the harvest tallied less than 205,000 tonnes. By the end of the third week (June 16) the crush was boosted to
668,000 tonnes; still trailing considerably last season’s tally of 1 mln tonnes cane.
The cane harvest in the Herbert region was due to start one week late on June 25 because of wet fields, while
output from the district should be lower this year. Conditions are similar in some other parts of Queensland,
while some regions like the Tablelands expect a larger harvest. Mackay Sugar started operations on June 4, with
an estimated cane crush of 5.1 mln tonnes. Mackay Sugar announced a staggered start of the mills. Farleigh
started on June 4, Marian on June 6 and Racecourse on June 11. The 2019 crop estimate for Mackay is 5 mln
tonnes based on an average cane production of approximately 74 tonnes/hectare. For Wilmar Sugar, 2 of their 8
mills started crushing on June 4, with the remainder following shortly after. The group plans to crush 15.4 mln
tonnes of cane this year, similar to last year’s 15.44 mln tonnes, as bigger crops in the Burdekin, Proserpine and
Plane Creek regions should compensate for the bad weather in Herbert. Sugar output is projected at 2.1 mln
tonnes. Further south dry weather has impacted prospects for the Bundaberg region, with the sugarcane harvest
likely to be down. The harvest is yet to start in New South Wales. The harvest is thought to be down this season
with some growers choosing not to harvest cane this year in response to low prices.
Australia’s 24 sugar mills should process 31.6 mln tonnes of cane, according to the ASMC, down 2.5% (almost 1
mln tonnes) on last year’s 32.5 mln tonnes, because of unfavourable weather during the growing season in some
regions. Furthermore, sugar output is expected to fall below last year’s 4.7 mln tonnes. On the basis that the
crushing season progresses well over coming weeks – allowing solid harvest progress and good sugar recovery,
WKS suggests sugar production should be no lower than 4.5 mln tonnes. Should cane tonnage be higher than
presently expected, (several analysts are still indicating as much as 34 mln tonnes), sugar production would come
in close to last year’s 4.7 mln tonnes.
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Source: http://www.bom.gov.au/climate/rainfall/
Fig 1 Australia: Weekly Crush
1,800,000
1,600,000
1,400,000
tonnes cane
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Week
2017 2018 2019
21ST JUNE 2019 WKS 3
AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Fig. 2 Australia: Cumulative Weekly Crush
18,000,000
16,000,000
14,000,000
12,000,000
tonnes cane
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
Week
2017 2018 2019
Fig. 3 Australia Weekly CCS
16
15
14
13
CCS
12
11
10
9
8
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Week
2017 2018 2019
21ST JUNE 2019 WKS 4
AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Why don’t’ we report sugar production?
There are no sugar production data in the public domain issued in conjunction with the weekly cane crush
for the Australian sugar industry. Considerable caution needs to be exercised if approximating actual sugar
production from cane tonnage crushed and sugar content. Commercial Cane Sugar (CCS) is an estimate of
the amount of recoverable sugar in sugarcane, measured as a percentage of the cane by
weight. Importantly, sugar content needs to be taken together with mill recovery of sugar. Mill recoveries
are improving along with improvements in technology. Some mills reportedly recover as much as 1.02kg
sugar per kg of CCS. A rough estimate of sugar production (tonnes tel quel) can therefore be derived using
the following formula: total sugar make = CCS x tonnes cane x 1.02 . The actual number however can vary
from this “theoretical calculation” depending on each mills recovery rate which also reflects losses in
bagasse, mud and molasses. In short, the Co-efficient of Work characteristics of sugar mills do vary quite
significantly. Furthermore, the crush numbers are derived by totalling the crush across multiple mills, so
using a simple theoretical formula can yield a distorted sugar production estimate as against the actual.
Historical Perspective
Australia: Annual Cane Crushed
40,000,000
35,000,000
30,000,000
25,000,000
Tonnes
20,000,000
15,000,000
10,000,000
5,000,000
0
2013 2014 2015 2016 2017 2018
Northern Herbert-Burdekin Mackay-Proserpine Southern New South Wales
21ST JUNE 2019 WKS 5
AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Australia: Annual Sugar Production
6,000,000
5,000,000
4,000,000
Tonnes
3,000,000
2,000,000
1,000,000
0
2013 2014 2015 2016 2017 2018
Northern Herbert-Burdekin Mackay-Proserpine Southern New South Wales
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
STATISTICS
Table 1: Australia Weekly Crush (tonnes)
Week Weekly To-Date Weekly To-Date
Ending Crush Crush CCS CCS
2019
2/06/2019 16,139 16,139 10.90 10.59
9/06/2019 188,719 204,858 11.30 11.07
16/06/2019 488,377 668,288 12.33
2018
3/06/2018 55,259 55,259 10.59 10.59
10/06/2018 212,666 267,925 11.19 11.07
17/06/2018 741,101 1,009,026 12.19
Source: Australian Sugar Milling Council (ASMC), WKS Estimates.
Table 2: Australian Weekly Crush by Region (tonnes)
Week North Herbert/Burdekin Central South Queensland NSW Australia
2019
2/06/2019 16,139 - - - 16,139 - 16,139
9/06/2019 46,516 67985 49,268 - 163,769 - 163,769
16/06/2019 89,828 268,809 129,740 - 488,377 - 488,377
Source: ASMC, WKS Estimates.
Table 3: Australian Cumulative Weekly Crush by Region (tonnes)
Week North Herbert/Burdekin Central South Queensland NSW Australia
2019
2/06/2019 16,139 - - - 16,139 - 16,139
9/06/2019 62,655 67,988 49,268 - 179,911 - 179,911
16/06/2019 152,483 336,794 179,010 - 668,288 - 668,288
Source: ASMC, WKS Estimates.
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Table 4: Australian CCS Content by Region (%)
Week North Herbert/Burdekin Central South Queensland NSW Australia
2019
2/06/2019 12.50 - - - 12.50 - 12.50
9/06/2019 11.50 12.82 7.50 - 10.85 - 10.85
16/06/2019 11.78 13.21 10.87 - 12.33 - 12.33
Source: ASMC, WKS Estimates.
Table 5: Australian Cumulative CCS Content by Region (%)
Week North Herbert/Burdekin Central South Queensland NSW Australia
2019
2/06/2019 12.50 - - - 12.50 - 12.50
9/06/2019 12.25 12.82 7.50 - 11.22 - 11.22
16/06/2019 11.99 13.13 7.88 - 11.46 - 11.46
Source: ASMC, WKS Estimates.
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Source: ASMC
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AUSTRALIAN CRUSH REPORT VOL 2. NO.1
PRESS REPORT
QSL-Wilmar court case resolved
with no appeal Cane harvest starts with 2 mills set
Queensland Sugar Limited (QSL) and for ownership change
Wilmar reached a confidential settlement
on the costs associated with Wilmar’s According to the CANEGROWERS
recent unsuccessful Supreme Court action organization, a nervous and reduced 2019
against QSL, and on that basis the matter sugarcane harvest has kicked off in
is now resolved, with no appeal to be Queensland with growers in two regions
sought. waiting on the outcome of mill sales
negotiations. Growers in both the Mackay
On 10 May 2019 the Supreme Court of
and Mossman districts are hoping the
Queensland dismissed Wilmar’s legal
next few weeks bring positive outcomes
action against QSL relating to losses
to transactions which will secure the
associated with the 2010 sugar production future of their local mills. CANEGROWERS
season, and awarded costs to QSL. has applauded both the Queensland and
Federal governments for committing to
QSL June 7. support the grower purchase of the
Editor’s Note Mossman Mill, which started its 2019
crush on 4 June and the additional
On 10 May 2019 the Supreme Court of commitment by the Queensland
Queensland dismissed Wilmar’s legal Government to Mackay Sugar which
action against QSL over losses incurred began this season’s operations on the
during the 2010 crop. During that same day. A successful outcome for
season, QSL had sold forward but the Mossman Mill has broader implications as
crop was hit badly by unseasonal rains. it is a required step to allow the
QSL’s losses were reportedly in excess of transaction between Mackay Sugar
AUD105 mln. Limited and Nordzucker to move forward,
Soon after incurring the losses, in March giving growers in that region much
2011, QSL announced that a needed security for the future as well.
“constructive dialogue” between millers
and QSL had allowed the Queensland CANEGROWERS, June 05.
sugar industry to agree an outcome to
manage the production shortfall Burdekin mills start crushing
experienced during the 2010 harvest. Two of Wilmar’s mills started operating
Millers supplying QSL agreed with QSL June 4 in the Burdekin (Kalamia and
that the amount of AUD105.5 mln Inkerman), with the other two Burdekin
properly represented the costs incurred Mills (Invicta and Pioneer) expected to
by QSL as a result of the weather-induced start on June 11. Wilmar’s Herbert and
shortfall for the 2010 season. An Plane Creek mills are expected to start on
independent review, undertaken by Ernst 18 June. Proserpine Mill is scheduled to
& Young, had confirmed those costs. start on June 25.
21ST JUNE 2019 WKS 10AUSTRALIAN CRUSH REPORT VOL 2. NO.1
Wilmar June 4.
Rain delays harvest in Herbert
Queensland government
The cane harvest in the Herbert region
will start one week later on June 25 announces support package for
because of the wet fields, while output Mackay Sugar
from the district should be lower this year. The government of Queensland
Conditions are similar in some other parts announced a AUD 14 mln (USD 9.7 mln)
of Queensland, while some regions like support package to help Mackay Sugar
the Tablelands expect a larger harvest. ahead of its potential purchase by
Growers noted that regulations over Nordzucker.
fertiliser use and protection of the Great
Barrier Reef, along with higher electricity ABC May 30.
prices and Indian export subsidies, will
add to the challenges this year. ASMC expects 2.5% drop in cane
output
ABC June 5. Australia’s 24 sugar mills should process
31.6 mln tonnes of cane in the upcoming
Nordzuker’s Mackay Sugar 2019 season, down 2.5% as against last
purchase remains uncertain season, because of unfavourable weather
The AUD 14 mln (USD 9.7 mln) aid during the growing season, according to
announced by the government of the Australian Sugar Milling Council
Queensland to help modernise Mackay (ASMC). Sugar output is expected to fall
Sugar’s mills will help meet the conditions below the 4.7 mln tonnes produced in
required to complete the sale of the group 2018 as a result.
to Nordzucker, but several obstacles still
remain. The Australian Securities and ASMC May 29.
Investments Commission (ASIC) still needs
to approve the proposal and growers will Rain could delay Queensland crush
need to sign a new cane contract with a The Herbert River region has seen light
return to the CCS basis for cane payment. but constant rainfall over the past weeks
which could make it hard for the harvest
A solution had to be found for the to start on time on June 18, according to
Mossman mill as the Far Northern Milling the local Canegrowers representative.
(FNM) growers’ group is still looking for Overall, rain in Queensland might delay
private investors to help take over the the harvest in some places and impact
mill. FNM was offered government yields, while it helped the crop develop in
support to help turn the mill into a biofuel other areas. Most regions expect a similar
plant, but the group is now threatening to harvest to last year.
cancel the plan unless the government
agrees by June 14 to use the fund for Queensland Country Life May 27.
operational purposes instead of CAPEX.
Wilmar Gears up for Crush
Newsport, May 31. Wilmar Sugar plans to start its eight sugar
mills in Australia in the coming weeks,
21ST JUNE 2019 WKS 11AUSTRALIAN CRUSH REPORT VOL 2. NO.1
with the first two due to start on June 4.
Wilmar expected to process about 15.41
mln tonnes of sugarcane this year, to
manufacture about 2.1 mln tonnes of raw
sugar. Bigger crops in the Burdekin,
Proserpine and Plane Creek regions
should compensate for the bad weather in
Herbert - big summer rain events causing
flooding and crop damage.
Wilmar’s regional crop estimates for the
2019 season are:
• Herbert – 4.26 mln tonnes
• Burdekin – 8.24 mln tonnes
• Proserpine – 1.61 mln tonnes Wilmar June.
• Plane Creek – 1.3 mln tonnes.
Wilmar May 21.
Wilmar Harvest Reports
Wilmar June.
21ST JUNE 2019 WKS 12AUSTRALIAN CRUSH REPORT VOL 2. NO.1
WKS Consulting
Brisbane, Queensland, Australia
lindsayjolly@wks-weknowsugar.com
www.wks-weknowsugar.com
Disclaimer
With respect to all the information contained herein, neither We Know Sugar Consulting., nor any
officer, servant, employee, agent or consultant thereof make any representations or give any
warranties, expressed or implied, as to the accuracy, reliability or completeness of the information
contained herein, including but not limited to opinions, information or advice which may be provided
to users of the document. No responsibility is accepted to users of this document for any consequence
of relying on the contents hereof.
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