Thursday, May 25, 2023
Mackay and Whitsunday Life
Wilmar Manager Grower Marketing
GEI pricing mechanism selection for 2023 season closed at the end of April, with growers choosing overwhelming to stay with forward pricing as opposed to pool products. This is despite the Wilmar Production Risk Pool delivering growers a final price of 622/t Actual in 2021 and currently forecast at $718/t Actual for 2022 season!
We have done some high-level analysis of the 2022 season now that grower pricing has been finalised for the Call, Target and GMPRS mechanisms – with some outstanding results.
Across all regions, Target price growers achieved an average of $546/t Actual with a range of fixations from $388 - $850/t Actual.
For growers using the GMPRS option for the 2022 crop, the average was $653/t Actual (range $552 - $850/t Actual) for their final 27 per cent of production. To determine the all-up Actual price, growers need to add the Allocation Account for Target and GMPRS, which is currently forecast around $38.50/t Actual.
To help growers with forward pricing decisions, we are compiling a longer-term analysis on the ranges and outcomes of grower Target pricing results over the years, which we will distribute shortly. Already we have seen a wide range of prices offered across the current three forward years.
For 2023, our Target growers have been selling into the rising prices, with less than 10 per cent of nominated GEI tonnes still to be fixed.
Commitments to our popular GMPRS mechanism grew again this year. Indicative pricing opened around the $810/t Actual level with some growers locking a portion of the tail end of their crop in at these levels. Most are sitting back and waiting to see how the season unfolds before getting too heavily committed on price for the cane production that is most at risk of delivery.
Where to from here as far as price is concerned? Right now, both the AUD and #11 appear to have reached a happy place. The AUD is locked in a trading range of 66-68 cents while the market works out the next move on US and AUS central bank rates decisions.
Similarly, sugar is establishing a 25.50 to 26.50c/lb trading range as focus remains on the output of Brazil’s crush and the speed at which sugar can get to market. We know this hiatus won’t last long, but it is nice to take a breather after an extremely volatile time on both markets.
For any queries, please contact Proserpine Grower Marketing Consultant Shirley Norris on 0437 803 019. Plane Creek growers can contact Angus McKerrow on 0419 238 536.
This graph shows the range of forward prices achieved by growers for the 2022 season, the average forward prices achieved, and the highest and lowest indicative prices for the season