About 33 million tons of sugarcane is grown annually in Australia. 90% of the income flows in from the global raw sugar market. With such a huge margin at stake, the industry needs to diversify to combat stilling sugar production and rising prices.
A study commissioned by Sugar Research Australia, shows that the sugar industry in the country is bowing to pressures from global demands and strict environmental policies enforced. The country’s raw sugar production has a serious lag, in using components to diversify, unlike many of its global competitors. The working existent infrastructure does not allow this expansion in range. An increase in the electricity production in Australian Sugar Mills, could help mitigate the slump, but that comes with its own set of issues says Australian Sugar Milling Council director of trade and economics David Rynne.
These mills produce 487 megawatts of electricity generation capacity, with a potential to generate profits from a cogeneration facility or an ethanol plant. The investment required is scant compared to the profits it can churn out. “A carbon price would be useful for us,” Mr Rynne said.
On the other hand, the growers are facing a downtime due to multiple reasons. Australia’s export quality sugar is regarded as one of the best in the world. Yet the starring profits don’t reach the growers who complain of some unfair practices. Food companies demand sugar produced under Bonsucro or Smartcane BMP guidelines, but refuse to pay the premiums. There is an increasing trend of recognition for products that come with environmental adherence. The industry can take initiatives in packaging and advertising the special effort taken by these growers in practicing green and clean methods, that will hit bullseye with consumer preferences these days.
The growers, owing to meagre income seek employment outside farming, this again has put a patch on farm growing. The Australian Sugar Industry can be a global leader with certain reforms and readjustments to the existing structure.