Australian Sugar Crush Hit by Delays From Strikes, Heavy Rain

(Bloomberg) -- Strikes and heavy rainfall across key growing areas are delaying Australia’s sugar crush, threatening exports and farmers’ ability to plant next year’s crops.

Months of industrial action by workers in many sugar mills, as well as a recent bout of wet weather in Queensland is posing an increasing risk to this season’s crop, industry body Canegrowers said. Around 8.5 million tons of the harvest in the state — which produces almost all of the country’s cane — has been crushed so far, about 1.5 million tons less than this time last year, it said.

Australia is the third-largest exporter of raw sugar, and more than 80% of its harvest is shipped overseas. Lower supplies from the nation could help to moderate a recent downturn in sugar futures, which recently dropped to the lowest in nearly two years. Still, Australian shipments are dwarfed by Brazil, the biggest exporter, minimizing the impact on the global market.

Workers at Wilmar International Ltd.’s Australian mills, representing about half of Queensland’s production, have been striking intermittently for higher pay since May. That’s meant many growers have been unable to access mills, putting them weeks behind schedule, Canegrowers said.

The heavy rainfall across Queensland has meant tractors and heavy equipment have been unable to access soggy fields to transport the cane, said Chris Bosworth, a director at Canegrowers and a sugarcane farmer in the region.

Many farmers may not plant a crop for next year if the wet weather lasts much longer, he said. The later farmers plant, the more likely it is that the seedings will be destroyed by rain as the region heads toward the wet season, which usually starts in late November or early December, Bosworth said. Sugarcane crops can’t be planted in wet soil.

“If you plant and the wet season rolls around a few weeks later, your crop is pretty much doomed,” he said. “Many of us aren’t willing to take that risk, but that also means we will have no income next year.”

--With assistance from Mumbi Gitau.