- Australia received plenty of rain in June.
- Some cane farmers are struggling to harvest waterlogged fields as a result.
- The mills’ crushing pace is therefore slowing.
Wet Weather Slows Cane Crushing
- Queensland, Australia’s main cane-growing region, received 26.26mm of rain in June.
- It’s not had this much rain in June since 2017.
- The mills had crushed 2.88m tonnes of cane by the 3rd July, up 419k tonnes year-on-year.
- However, some cane farmers are now struggling to harvest waterlogged fields, which means crushing is slowing.
- It dropped last week and could continue to do so if it keeps raining.
What Does This Mean for the Australian Sugar Industry?
- Above average rainfall could persist until October.
- If it does, we may need to reduce our sugar production and raw sugar export availability estimates (4.4mmt and 3.4mmt).
- This is because cane and raw sugar production, along with deliveries to port, could be delayed.
- Nevertheless, we currently think Australia will satisfy 30% (1.24mmt) of the Far East’s raw sugar demand (4.1mmt) in Q3’21.
- Thailand’s raw sugar export availability is at a 16-year low, meaning nominations are flying in, especially from Indonesia, Japan and South Korea.
- However, if Australia’s crushing pace seriously slows and results in logistical disruption, some importers may have to draw down stocks or turn to other origins for their raw sugar.
On a Positive Note…
- All this rain has helped cane development and means 88.26 tonnes should be harvested per hectare, up 1.85 mt/ha year-on-year.
- The canes’ sugar content also looks better than recent seasons (but it may be diluted if it continues to rain).
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