Australian government intervenes in Wilmar sugar row

[SYDNEY] The Australian government has made a rare intervention in the country's sugar market, effectively forcing Singapore-listed miller Wilmar International Ltd to end a two-year dispute with cane growers in the state of Queensland.

Deputy Prime Barnaby Joyce, under increasing pressure from his right-wing National Party's agricultural base, said late on Wednesday the country would introduce a mandatory code of conduct forcing millers such as Wilmar to allow farmers to choose who sells the sweetener after it has been processed by mills.

The dispute in the world's No 4 sugar exporter began in 2015 when Wilmar, MSF Sugar, owned by Thai sugar giant Mitr Phol , and the Australian unit of Chinese agribusiness Cofco Corp said they would no longer sell supplies of processed sugar through an industry-owned marketing body.

Their plan to switch to in-house marketing arms ignited a row with growers, who feared lower prices.

While the other refiners backed down, agreeing with industry body Queensland Sugar Limited (QSL) to allow farmers to choose their marketer, Wilmar stuck to its guns.

Growers typically send their crops to processors, before refined sugar is sold via marketing bodies.

"We have done our very best .. to come to an agreement without, as I've always said, the clumsy fingers of government involved," Mr Joyce told reporters in Canberra.

"But now we have the federal government involved."

Wilmar did not immediately respond to requests for comment.

The issue had been a thorn in the government's side, adding to pressures that has led to a slump for Prime Minister Malcolm Turnbull and his Liberal Party-led coalition government.

Frustration peaked when a Queensland Liberal Party lawmaker, George Christensen, threatened to resign over the issue, a defection that would have eroded Mr Turnbull's majority in parliament.

"This is a win for the little guy against a multinational behemoth," Mr Christensen said in a statement.

"This has been a long drawn-out battle and growers have suffered tremendous pressure as a result."

The government intervention comes as growers in one region begin to count the cost of Cyclone Debbie, which struck the country's northeast on Tuesday.

Hundreds of hectares of sugarcane crops have been flattened, industry body Canegrowers estimates, though damage assessments may take several weeks.

REUTERS