Tuesday, May 21, 2013

Sugar Shenanigans

Shenanigans in sugar milling and marketing just keep on trucking apparently, along with the cane itself which may also be trucking down the range from Tablelands to Mossman. That follows a decision by growers to ditch the MSF Tablelands mill in favour of the Mossman marketing arrangements with Queensland Sugar Ltd (QSL).

The last post on this, sugar marketing conundrum, suggested that this didn't really seem to make sense, at least for the reasons that had been stated by the growers. The MSF Tableland is owned by Thailand's Mitr Phol which has the largest presence in FNQ including the Mulgrave and South Johnstone mills. Historically QSL was previously the monopoly single-desk marketing body in the state.

This saga took a new twist today when ABC Far Out revealed leaked documents suggesting previously unrevealed negotiations between QSL and Wilmar International: Secret sugar selling plan revealed:


It's the document Queensland Sugar Limited admits it would rather you didn't know about.

A confidential marketing agreement which shows QSL has been negotiating a plan which would have delivered full control of Australia's export sugar to the multinational giant, Wilmar. 
 

Wilmar established a leading position in Australian sugar through a takeover of Sucrogen, previously the sugar division of CSR, and boasts to be Asia's leading agribusiness group. The Financial Times reported this month: Wilmar joins the sugar big league


Among the commodities trading houses which took delivery of the largest amount of sugar on record on the ICE futures exchange in New York last week, one name stood out.
  
Wilmar International, better known in the industry as the world’s leading producer and trader of palm oil, was a receiver of sugar along with leading agricultural commodities trading houses Cargill and Bunge. Louis Dreyfus Commodities, Noble Group and Sucres & Denrées were on the delivery side.

The presence of Singapore-based Wilmar shows how the trading house, under the direction of Jean-Luc Bohbot, who moved from Sucres & Denrées, has become a key player in the highly competitive sugar market almost overnight.

Mr Bohbot, whom one seasoned market participant describes as “the smartest trader in the sugar business by far”, built up Wilmar’s sugar trading operations from almost nothing after joining in 2011. Today, the company has businesses along the entire sugar supply chain. Mr Bohbot says that Wilmar is the only leading sugar trading operation with “a large exposure to production, refining, trading and distribution”.


Who would have thought sugar milling and marketing could be filled with such mystery and intrigue? Meanwhile growers may at least be thankful for a lower $AUD as sugar prices continue the downward momentum recent months..

Update: Far North Rural Report Wednesday 22 May




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