By Michael Byrnes
SYDNEY, Nov 1 (Reuters) - Australian raw sugar production is
set to fall by a further 10 percent over the next two years due
to a flood of Indian exports, low world prices and the high
Australian dollar, industry body Canegrowers said on Thursday.
Low-priced Indian sugar exports were penetrating east Asian
markets, including China and Indonesia, and replacing some
Australian tonnages, Canegrowers chief Ian Ballantyne told
Reuters in an interview.
"I think in the next two years or so we'll see probably
another 10 percent of (Australian) growers leave this industry
and I think we'll see contraction of sugar production maybe of up
to that order too," Ballantyne said.
He said Australia's sugar production this season, with the
harvest to be completed around Christmas, would total between 4.4
million tonnes and 4.6 million tonnes, down from 4.7 million
tonnes in 2006/07.
This followed a late start to the crushing season because of
heavy unseasonal rain. The exact figure would depend on monsoonal
rains in December, which could interfere with the end of the
crushing season and cause up to 1.5 million tonnes of cane to be
left in the fields.
A 10 percent fall in production of raw sugar over the next
two years would reduce Australian output by about 500,000 tonnes,
cutting production to around 4 million tonnes.
Australian raw sugar production has already fallen in recent
years from 5 million tonnes or more because of weather problems
and poor world prices.
Ballantyne said low world sugar prices and the impact of the
Australian dollar, currently at 23-year highs against the U.S.
dollar, would cut average returns to Australia's remaining 4,200
sugarcane growers to about A$265-A$275 a tonne, down from A$370 a
tonne last year.
"I don't believe any company in Australia involved in sugar
cane or sugar milling will be in the black this year," Ballantyne
said.
Australia's biggest sugar company is CSR Ltd <CSR.AX>.
((Reporting by Michael Byrnes, editing by Richard Pullin;
[email protected]; Reuters Messaging:
[email protected]; +61-2-9373 1825))
Keywords: AUSTRALIA SUGAR/