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Simon Hood
Wilmar Manager Grower Marketing
As the close of the 2023 pricing season nears, it's an opportune time to reflect on the journey it has been.
Opening in July 2020 with an indicative forward price of $350/t, the trajectory since then has been nothing short of remarkable, with the price steadily climbing to a peak of $950/t towards the end of 2023.
Describing the past 12 months as tumultuous would be an understatement.
At the beginning of 2023 pricing started at $550/t, steadily growing to $840/t, before dropping to $725/t in July. By late October, prices soared and we witnessed the peak of $950/t, only for it to drop once more to around $650/t by the start of 2024. This year we have seen prices fluctuate back up to $810/t, ultimately closing the season at around $675/t.
Comparing the average price of $550/t over the past three years with the $750/t average of the past 12 months, shows the volatility experienced.
Reflecting on Wilmar Sugar and Renewables’ performance in managing pools throughout this period, the primary pool used by growers was the Production Risk Pool, equivalent to QSL’s Harvest Pool. These pools are managed over a seasonal timeframe and prices may not be directly comparable to the average prices achieved by growers pricing on the forward market over a three-year period.
Despite the fluctuations, Wilmar remains dedicated to maximising returns for growers through informed pool pricing decisions. The graph below shows that growers who price under the Wilmar Production Risk Pool are consistently better off over a three-year period, than those who market with QSL’s Harvest Pool. With the 2023 season ending, significant changes to pool prices are unlikely with the expiry of the May #11 contract.
Over the past month, Wilmar’s Grower Marketing team has been bolstered by the addition of two new staff members, and some changes to increase the support for growers across all milling regions. Owen Richards will support Fiona Villis and Meghan Wilson in the Burdekin region with grower pricing. He will also be exploring new avenues to enhance profitability for growers across all regions through new products and services.
Similarly, Angus McKerrow will now split his time between the Plane Creek and Herbert regions to facilitate Wilmar’s growing presence.
In Townsville, Megan Hawke will oversee the administration by providing support to Wilmar’s growers and field team. Megan will work on enhancing grower relationships through updated communications and the development of pricing systems and tools.
Be sure to stay tuned for the upcoming quarterly analysis of pool performance and comparative outcomes. This report is a valuable resource for growers when evaluating their marketing strategies.
Additionally, Wilmar Sugar and Renewables will release an annual 2023 season pricing analysis to combine the results from all products and regions. It will provide a basis for growers to assess their current pricing strategies, and will be a reference point for the Grower Marketing team and how they will assist in GEI sugar pricing decisions, for the 2024 season and beyond.
Wilmar’s Production Risk Pool has outperformed QSL’s Harvest Pool for three consecutive years.
