Production down11 % yoy
Decline in price due to global market pressures
Sugar cane output was lower than for the previous two years but remained above the decade average. Prices were also down, due to record production in India and Thailand, resulting in lower returns to canegrowers.
Approximately 1.9 million tonnes of cane was crushed in NSW for the season ending in December 2017, around 6% of Australia’s sugar cane. Sugar production was 226,316 tonnes IPSx, down 11% over the previous year. Approximately 15,500 hectares of sugar cane was harvested in NSW with a yield of 121 tonnes of cane per hectare26, 27.
The NSW season commences in June, cutting across financial years. This means that production for the financial year consists mostly of the 2017 harvest and a small part of the 2018 harvest. The 2017 season had periods of very dry conditions followed by months with very high rainfall into June 2017, particularly in the Yamba region92.
Growers responded to an expectation for lower prices in the following season by harvesting a higher percentage of one year old cane in 2017-18 92. In the 2017 season, 14.8% of one year old cane was harvested, up from 12.7% in the previous year.
Tonnes cane per hectare harvestedSource: ASMC (2018)
Prices declined due to a number of pressures on the global market. These included export liberalisation in India, the expiration of quota restraints in the European Union, and an increase in production by most of the major global sugar producers (including record production in India and Thailand), which resulted in a global oversupply. These pressures were offset by the weak Australian dollar26, 82.
NSW exports of sugar cane declined 50% year-on-year to approximately $1.6 million54. Philippines and New Zealand were the two largest export destinations, at $542,000 and $349,000.
Global sugar production was reached record levels due to record production in India and Thailand, resulting in a global surplus114. By comparison, Australian sugar production was 4.5 million tonnes. For Brazil, the largest producer of sugar, estimated production reduced as producers shifted toward ethanol production rather than sugar114.
Human consumption of sugar reached a record 174 million tonnes, 3.4 million tonnes higher than the previous year96. India, Pakistan, Bangladesh and the United Arab Emirates all recorded increases in consumption from population growth.