Production of sugarcane in NSW in 2020-21 increased by 9% over the prior drought impacted season, to total 1.74 million tonnes, although this was still 12% below the 5-year annual average to 2018-19. ³⁹ This production represented just over 5% of total cane crushed in Australia in 2020.

The lift in cane crushed was predominantly due to increased yield with New South Wales cane harvested per hectare increasing 6% year-on-year, to average 118.5 tonnes per hectare in 2020. For the 2020 harvest season, 60% of the area harvested was cut as two-year old cane. ¹⁸⁹ Given that the New South Wales harvest period typically runs from June to December most of the 2020 season’s harvest relates to the 2020-21 financial year.

Increased production was also attributable to a 2% increase year-on-year in area harvested for milling, which increased to 14,712 ha. However, this area harvested for milling was still 6% below the 5-year average to 2019. ³⁹ Moderating overall production, the 2020 crop’s commercial cane sugar content was 11.93 CCS, 3% lower than the prior year.

Global prices for sugar increased through 2020-21 following lower global production amongst major producers such as Brazil, India and Thailand in 2019-20. This resulted in a production-consumption deficit and a decline in ending stocks amongst key producing countries. Consequently, there have been price surges in first half of 2021 with the average futures contract price for raw sugar (ICE Futures Sugar #11) 20% higher in 2021. ^{206 211 62}

Global growth in the demand for sugar has moderated over the last five years with a compound annual growth rate of 0.7%, a result of a combination of increasing consumption amongst developing countries and stable or decreasing consumption amongst developed countries. On the supply side, a key driver of global sugar markets remains India’s policy decisions regarding export subsidies. India has been a net exporter of sugar in recent years and was the third largest in 2019-20 with the Government of India’s export subsidies influencing global sugar prices. ¹⁷⁴ At the same time in Brazil, the world’s largest sugar exporter, sugarcane mills alter their mix of sugar or ethanol production in response to world sugar demand and supply conditions. This has the effect of moderating excess surpluses or deficits in the sugar industry. With reduced demand for oil and ethanol following the Covid-19 pandemic's impact on travel, more of Brazil’s sugarcane production was being directed towards sugar production in 2020-21. ⁶³ Overall, dry conditions experienced in the key exporting countries Brazil and Thailand in 2020-21 are expected to limit global sugar supply in the current production year. This has led to surges in world sugar prices in the first half of 2021. However, it is expected that sustained price increases will encourage increased production from the major exporting nations in 2021-22. ⁶²