Approximately 85 per cent of the raw sugar produced in Australia is exported, which is a large proportion when compared to most sugar-producing companies. This means that the viability of the industry depends largely on the world market prices.

The remaining 15 per cent of raw sugar produced is refined for domestic use and export.

Major export markets are Canada, Japan, Malaysia, Republic of Korea, China, New Zealand, USA and Taiwan, with Asia accounting for about 65 per cent of total exports.

Sugarcane is grown from Mossman and the Atherton Tableland in North Queensland down the east coast to Grafton, North New South Wales, and in the Ord River region in Western Australia. Approximately 94.2 per cent of Australia's total sugar supply is grown in Queensland, 5.1 per cent in New South Wales and 0.7 per cent in Western Australia

There are over 545,000 hectares in Australia devoted to cane growing. In Queensland alone, 508,000 hectares are dedicated to sugarcane, which is a 40 per cent increase since 1988.

As of June 30 1998 there were 6472 cane growers in Queensland, 596 in NSW and 21 in Western Australia. There are 26 sugar mills (raw sugar factories) in Queensland, three in New South Wales and one in Western Australia.

GOVERNMENT POLICY:
In 1989 the Australian government removed the embargo on sugar imports, and since then there has been a substantial liberalisation of Australia sugar industry policy. In 1997 the import tariff of $A55 ($US28.67) a tonne on raw and refined sugar was abolished.

The industry receives no price support or export subsidies from the government and as such is exposed to the uncertain world price. Various marketing arrangements including long term contracts have been used to cushion income variability. For example, Queensland sugar is sold to end user refiners on a cost, insurance, freight (cif) basis.

A relaxation of the previously centralised land assignment system in the late 1980s facilitated a large expansion in the area of cane harvested in Australia. The establishment of additional refinery capacity has increased competition in the market over recent years and exports of white sugar have increased as a result of the policy.

The Sugar Industry Infrastructure Program run by Agriculture, Fisheries & Forestry - Australia (AFFA) and the Queensland Department of Natural Resources provides funding for infrastructure development (transport, irrigation and drainage) in the Queensland and NSW sugar industries. The program originally involved $A40 million ($US20.85 million) in government funding.

The objective of the program is to enhance economic performance by providing funding for infrastructure projects to promote funding and growth, it provides increased water availability and management and provision of cane transport infrastructure.

OUTLOOK:
Australian sugar production is forecast to fall by 24 per cent to around 4.2 million tonnes in 2000/01. The main reason for the decline is an outbreak of orange rust, although crops were also affected by an infestation of rats.

Heavy rains that fell in Australia recently will not affect the current crops, but are set to affect production over the next few years. Prolonged waterlogging and washouts will force farmers to replant cane, particularly in the Mackay region, which will have a devatating effect in light of increase planting in the spring.

The smaller 2000/01 production will mean a substanitial decline in exports, by a forecast 25 per cent to 3.1 million tonnes. Higher world prices and a weaker Australian dollar mean that the value of exports is forecast to fall to a lesser extent - by approximately 10 per cent to slightly under $A1 billion ($US521.2 million).

ENVIRONMENTAL FACTORS:
Reliable rainfall, or stored water for irrigation, is vital to profitable cane growing and sugarcane accounts for over 40 per cent of Queensland's water usage. Irrigation is essential for crop growth, especially in parts of Queensland, and as such the Bureau of Sugar Experiment Stations (BSES) has implemented a rural water use efficiency program for the sugar industry. The target for all regions is to increase average Water Use Efficiency (WUE) by 6 per cent with 70 per cent of irrigators using Best Management Practice by 2003.

The current Australia sugarcane crops are being affected by the outbreak of orange rust disease, which has significantly reduced yields from the main Queensland sugar variety Q124. In response, the BSES has established a special taskforce to fight the disease, as well as joining with the Cane Protection and Productivity Boards and mill and grower representatives to work together to formulate local strategies to combat orange rust.

MAJOR PLAYERS:
The Queensland Sugar Corporation was established by the Queensland Parliament under the Sugar Industry Act 1991 and commenced operations on 15 July 1991, absorbing the marketing responsibilities of The Sugar Board (1923-1991) and the production and regulation responsibilities of the Central Sugar Cane Prices Board (1915-1991). The Corporation is responsible for the single desk marketing of Queensland's entire raw sugar production and the co-ordination of production regulations. It is also responsible for co-ordinating the provision, control, management, operations and maintenance of the bulk sugar terminal facilities.

The major sugar producers in Australia are Colonial Refining Company (CSR) manufacturers, MacKay Sugar Cooperative, Bundaberg and several single cooperative and one privately-owned sugar mills.

   -------------------------------
   COMPANY           % TOTAL RAW
                     SUGAR OUTPUT
   -------------------------------
   CSR                    37
   MACKAY SUGAR
   COOOPERATIVE           20
   BUNDABERG              20
   SINGLE COOPERATIVES,
   (INC. PRIVATELY-OWNED) 21
   -------------------------------
   (Source: Australian Sugar Milling Council)

   CSR MILLING SERVICES AND RAW SUGAR PRODUCTION
   --------------------------------
   Season    Sugarcane  Raw sugar
              crushed   produced*
   -------------------------------
   1999       14,866      2,148
   1998       14,185      1,850
   1997       15,664      2,296
   1996       14,689      2,084
   1995       13,715      1,905
   -------------------------------
   * IPS: International Pol Scale. Polarisation is a measure of
the sucrose content of sugar.

(Source: CSR)

KEY INDICATORS:
   Australia's sugar indicators
   --------------------------------------------------------
                UNIT    1997   1998   1999   2000   %CHG
                        -98    -99    -00p   -01f
   --------------------------------------------------------
   AREA       `000 ha    420    414    419    411   -1.9
   PRODUCTION      kt  5,567  4,998  5,481  4,151  -24.3
   EXPORTS         kt  4,489  3,751  4,142  3,103  -25.1
    - VALUE       A$m  1,716  1,256  1,101    993   -9.8
   --------------------------------------------------------
   p - preliminary
   f - ABARE forecast

(Source: ABARE)

INDUSTRY CONTACTS:
CSR SUGAR
Ground Floor
18 Little Cribb Street
Milton QLD 4064
Australia

SUGAR RESEARCH INSTITUTE
Sugar Research Limited
Box 5611
Mackay Mail Centre
Queensland 4741
Australia
Tel: (07) 4952 7600
Fax: (07) 4952 7699
Web site: www.sri.org.au

AUSTRALIAN BUREAU OF AGRICULTURAL AND RESOURCE ECONOMICS
Cnr Broughton and Macquarie Streets
GPO Box 1563
Canberra, ACT 2601
Ph: +61 2 6272 2000
Fax: +61 2 6272 2001

BSES
Bureau of Sugar Experiment Stations
PO Box 86
INDOOROOPILLY QLD 4068
Ph: 61 (7) 3331 3333
Fax: 61 (7) 3871 0383
Web site: www.bses.org.au

CANEGROWERS
GPO Box 1032
BRISBANE Q 4001
http://www.canegrowers.com.au

QUEENSLAND MECHANICAL CANE HARVESTERS
PO Box 669
MACKAY MAIL CENTRE Q 4741
caneharvbit.net.au

AUSTRALIAN SUGAR MILLING COUNCIL PTY LTD
GPO Box 945,
Brisbane QLD 4001
Ph: (07) 3221 5633
Fax: (07) 3221 1310
Email: asmcpowerup.com.a

NSW SUGAR MILLING CO-OP LIMITED
Broadwater Mill
BROADWATER NSW 2472

SUGAR RESEARCH AND DEVELOPMENT CORPORATION
PO Box 12050
Brisbane Elizabeth Street
QLD 4002
Telephone: (07) 3210 0495
Facsimile: (07) 3210 0506
Email: srdcsrdc.gov.au