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Wilmar warns of potential Australian sugar production shortfall
[SYDNEY] Australia's sugar production during the 2014/15 season may miss official estimates as a result of recent dry weather across the northeast coast of the world's third-largest raw sugar exporter, Wilmar International Ltd said on Wednesday.
Much of Queensland, which accounts for more than 95 per cent of the Australian sugar cane production, received less than half the typical levels of rain between January and March, Wilmar said.
Australian sugar production relies on rains during the first few months of the year when rainfall is at its heaviest.
Less Australian output would support global sugar prices, which fell to more than six-year lows in March on ample supplies.
Benchmark raw sugar futures settled up 0.23 cent, or 1.8 per cent, at 12.77 cents a lb. Total volume exceeded 216,000 lots, more than double the 250-day average, preliminary Thomson Reuters data showed.
John Pratt, executive general manager north Queensland at Wilmar International, said the possible production shortfalls would not be evident for another couple of weeks, but he was concerned by the threat of more unfavourable weather. "The El Niño pattern that is forecast would impact on probability of rainfall in the medium to long-term, so we will continue to monitor the situation and the potential impact on the harvest," Pratt said.
Australian sugar production during the 2014/15 season, which started July 1, was last month estimated to hit an eight-year high of 4.7 million tonnes.