North Queensland cane growers who supply to miller Wilmar continue to hold out for cane supply agreements, despite edging closer to the start of the 2017 crushing season.
Wilmar and marketer QSL have been at loggerheads since 2014 over an on-supply agreement (OSA) which allows growers a choice on a marketing agent for their sugar. Once a OSA is in place, a cane supply agreement is put in place.
While the two entities are making progress on an OSA following state government-funded mediation in March, the 550 growers in the Herbert River collective – who account for 92 per cent of the cane supply to Herbert River mills – continue to stand their ground.
Canegrowers Herbert River manager Peter Sheedy said while growers wanted to see the crop harvested and processed they were united in holding out for the right agreement.
“Growers are still very strong that they want the choice,” Mr Sheedy said.
“We are moving closer to the time when crushing should commence in June and we would expect as soon as a cane supply agreement is reached, the crushing will get going.
“But that will be largely at Wilmar’s hands.
“We all want to see this crop harvested and processed and the mills have been giving plenty of publicity that they are preparing for the crop ahead and doing significant maintenance preparing for that crop.
“We are ready and willing to finalise all of that as far as the Herbert River collective goes.
“Growers are over it but they have held out this long, they are standing their ground.
“I think it’s progressing – but slowly.”
Mr Sheedy said the situation meant the region had lost “an opportunity” to put additional revenue into Hinchinbrook Shire because growers had been unable to forward price their sugar.
“Everyone has lost a heap of money by what has happened now because were weren’t able to do any pricing when the futures market peaked in the last quarter of 2016,” Mr Sheedy said.
“Prices are still good and in historical terms they are a lot better than what we had several years before.
“The QSL outlook for 2017, 2018 and 2019 season has prices hovering around $500/tonne mark and that’s a good price.”
QSL said last week it had provided feedback on Wilmar’s most recent draft of the OSA and hoped to reach agreement on the final contract form soon.
The 2017 harvest of some 4.5 million tonnes of cane in the Herbert River is expected to begin in June.
Mr Sheedy said the crop was a “good average crop”.