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Sugar prices hit by high $A
23 Sep 2003
Fears of a worldwide surplus and the continuing strength of the $AUD mean prices are being kept well below break-even level for growers. The New York No 11 spot price for the October 2003 sugar contract closed at US5.97 cents a pound on Friday September 19, while the March 2004 contract closed at US6.19 cents. The May 2004 contract did slightly better at US6.23 cents - but that's still below cost, according to Canegrowers.
Ian Ballantyne, Canegrowers' GM, said prices are "pretty flat", While exports for the remainder of 2003 have mostly been contracted under the industry's hedging system, prices for early 2004 are of concern.
The average Australian producer is looking at a break-even price of somewhat more than $275 to $280 per tonne, Mr Ballantyne said. But if you do a direct conversion on today's price - at the March contract for example - it is $203, not very much.
The world oversupply has hit Australia hard, as the nation exports 85 per cent of its crop. It looks as though there'll be a surplus again this year and this expectation is holding prices back. One canegrower from Ayr in far north Queensland said prices are the worst she can remember for 20 years.
Tradingroom.com.au, 22/9/03.
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