BAD NEWS: The crush forecast has dropped for 2019 after a dry summer season.
BAD NEWS: The crush forecast has dropped for 2019 after a dry summer season. Brian Cassidy

Crushing forecast down on 2018 season

THE extended dry period, water and electricity prices have taken their toll on the local sugar industry, with crush estimates being released.

Bundaberg Sugar cane supply manager Robert Powell said numbers were slightly down on what they were last year.

"It is due to the dry summer,” he said.

"We're looking at about 1.2million tonnes over 16 weeks without rain, we've allowed two weeks of wet weather.

"We crushed a little over 1.3million tonnes last year and that suffered a bit because of the wet we experienced around Melbourne Cup day (in 2017).

"One of the problems we've had the last two years in a row is the weather conditions haven't been really favourable for growers and millers.”

Mr Powell said he hadn't seen conditions like the ones over the last 12 months.

"I certainly can remember dry conditions when I was a kid,” he said.

"I haven't seen them this bad in my working life.”

Earlier this week the Australian Sugar Milling Council said the nation's 24 mills were expected to manufacture less than the 4.7 million tonnes of raw sugar produced last year.

ASMC chief executive officer David Pietsch said good news for the the 2019 season was hard to come by.

"Good news is a little hard to find, with the cane crop estimated at 31.6 million tonnes - 2.5 per cent down on 2018 - and world prices remain stuck in a range well below our average cost of production,” he said.

"Weather conditions have not been ideal - too wet in the north and too dry in the south - and market conditions have created uncertainty.”

In recent years, a huge surge in sugar production in India, subsidised by the Indian government, has swamped the market and driven prices down to 11.5-13.5 US cents per pound.

"Most of our raw sugar is exported onto the highly competitive global market so the impact of the extra subsidised sugar has been profound,” Mr Pietsch said.

Estimates from independent analysts calculate the revenue loss to the Australian sugar sector at more than $469 million over the three years from 2017-18 to 2019-20.

"Talks with the incoming Trade Minister will be a priority for ASMC,” he said.

"We're hoping for a prompt start to what will be a lengthy but important dispute process at the WTO in Geneva.”

ASMC expects a formal dispute panel to commence at the World Trade Organisation in the coming weeks.