Sugar


Overview

The Australian sugar industry produces raw and refined sugar from sugarcane. Around 95 per cent of sugar produced in Australia is grown in Queensland and about five per cent in northern New South Wales, along 2,100 km of coastline between Mossman in far north Queensland and Grafton in northern New South Wales. A sugar industry was established in Western Australia in the Ord River Irrigation Area in the mid 1990s but ceased operations in 2007.

Photo of a sugar cane crop

More that 80% of all sugar produced in Australia is exported as bulk raw sugar, making Australia the second largest raw sugar exporter in the world. In recent years, Asia has become a major focus with key export markets including South Korea, Indonesia, Japan and Malaysia which are our most important markets.

Marketing

The Queensland sugar industry was deregulated on 1 January 2006. Since then, Queensland Sugar Limited (QSL) has entered into voluntary agreements with the majority of Queensland mills to market their export raw sugar. This makes it responsible for more than 90% of all of raw sugar exported from Australia. Mills not contracted to QSL independently market their own sugar.

QSL undertakes export sales direct to raw sugar refiners in a number of countries. Proceeds are pooled for payment purposes and distributed back to mills and growers after being adjusted for marketing costs incurred by QSL. With the pooling of sales proceeds, producers receive an average of prices received from sales during the course of the year.

In New South Wales, white and raw sugar is largely sold directly onto the domestic market by the New South Wales Sugar Milling Co-operative.

Returns to producers are determined primarily by the world futures price for sugar but are also influenced by the level of the Australian dollar, regional sugar premiums and the costs of marketing and transporting the product.

Daily updates of information on world sugar prices and a daily sugar market report is published by Queensland Sugar Limited.

International sugar market information, reports and statistics can also be obtained from the International Sugar Organisation.

Sugar industry assistance and reform

The Sugar Industry Reform Program (SIRP) 2004 was established to support and promote comprehensive reform and restructure of the Australian sugar industry.

It followed an industry commitment to actively pursue long term economic, social and environmental sustainability by undertaking structural change, rationalisation and restructuring, and to investigate diversification, value adding and alternative use of sugar cane land. This commitment was captured by a Statement of Intent signed by industry leaders.

An Industry Oversight Group was appointed by the Australian Government to oversee progress on the implementation of sugar industry reform, including refinement of reform priorities, developing a strategic industry vision and aligning regional plans with the industry vision.

The strategic industry vision can be found at:

The Australian Government also established Regional Advisory Groups comprising local sugar industry and community representatives, supported by Sugar Executive Officers, to help drive local reforms.

The Advisory Groups were responsible for identifying the industry’s key challenges and the most appropriate solutions, which reflected each region’s unique circumstances within an overall industry strategic framework.

SIRP 2004 has been completed, with almost $335 million provided for a range of measures including:

  • Regional and Community Projects; 
  • Sustainability Grants;
  • Income Support (including business planning for income support recipients);
  • Business Planning (growers and harvesters);
  • Business Planning (mills);
  • Re-establishment Grants (growers and harvesters);
  • Grower Restructuring Grants;
  • Retraining;
  • Crisis Counseling; and
  • Intergenerational Transfer.

ABARES has completed an evaluation of the program which reports on the impacts of the various elements and includes details on take-up and expenditure for each.