FOLLOWING Singapore-based Wilmar Sugar’s decision to exit the QSL export system, Thai-owned MSF Sugar and Chinese-owned COFCO have also confirmed their intention to withdraw from single-desk marketing arrangements.
From July 2017, all three companies intend to market raw sugar for export from their mills.
Queensland Agriculture Minister John McVeigh said it was his job to work with industry to find the best path forward for all sectors.
Mr McVeigh said he would prefer for growers to be offered a real choice in sugar marketing arrangements.
“While I recognise that the millers are free to leave the QSL model, as Minister, I remain ready willing and able to work with industry to see what’s possible and what options may be available if they wish,” he said.
“I think it’s time that the industry bring its own leadership to bear through the Australian Sugar Alliance, the Chairman being John Pratt from Wilmar and the Deputy Chairman being Paul Schembri from Canegrowers, to start working through how the new marketing arrangements will work.
“As I have stated a number of times publicly, the industry has been deregulated since 2006, and the industry must determine its own destiny.”
MSF Sugar is Australia’s second largest milling interest did not roll over its QSL three-year supply agreements in 2011.
The Gordonvale-based company announced its decision to withdraw on Friday; by Monday morning Chinese agribusiness company COFCO - which owns Tully Sugar – decided to do the same.
Tully Sugar said it had provided written notice to QSL that as a result of the decisions of Wilmar and MSF Sugar to not extend their agreements, Tully Sugar will not extend its Raw Sugar Supply Agreement (RSSA) beyond June 30, 2017.
Industry body Canegrowers described the news from COFCO as “nothing short of farcical”.
A statement from the group said: “The parties which have since served notice on QSL appear to be thumbing their nose at the collaborative process being sought be the government and industry, not using the talks to put cards on the table, instead sitting on the knowledge that their next move was days away.”
On Tuesday, Wilmar Sugar reaffirmed that it would not return to the voluntary QSL marketing arrangements.
Following a meeting of industry stakeholders last week, Wilmar sent Mr McVeigh a letter, reiterating their view that the industry needs a new marketing model to replace QSL.
Wilmar International’s group head of sugar Jean-Luc Bohbot said their sugar pricing and marketing performance in the past two years demonstrated the potential for growers to achieve better returns under their new model.
“While Wilmar recognises its decision to exit QSL is a significant change for the industry, it firmly believes the new marketing partnership will deliver better returns for both Wilmar and growers,” he said.
“As such, Wilmar does not believe it would be in the spirit of constructive cooperation to participate in further discussions if they are based on the premise of remaining within QSL.”