Mills in a battle to lure growers
A PRICE war has broken out between Bundaberg Sugar and the Isis Central Mill, as the companies battle it out to attract the region's cane farmers.
Bundaberg Sugar is aiming to lure growers back to its Millaquin and Bingera mills with a bonus of $7 per tonne for cane from land that has not supplied the company since 2008.
“We need more cane in order to keep Bingera open,” Bundaberg Sugar general manager Ray Hatt said.
“Because we've got a good sugar price at the moment, we can give growers something that will help pay for that extra bag of fertiliser and increase yields.”
He said the company aimed to process 1.8 million tonnes of cane by 2012, and two million tonnes after that.
“We need to have two million tonnes — and we will get it,” he said.
He said the region's sugar industry had been in decline, but incentive schemes such as the bonus, plus long-term pricing plans and higher prices were encouraging growers to return to cane.
“Bundaberg Sugar had 2.6 million tonnes of cane in 2004, only six years ago — in 2009, we had 1.51 million,” he said.
“This year we expect 1.57 million, but next year we should be going higher to the same kind of figures we saw in 2008 because the price is as good as it's been in 30 years.”
Isis Central Mill general manager John Gorringe said he did not believe Bundaberg Sugar's new offer would prompt the Isis mill growers to jump ship.
“There is competition for cane and the Isis mill's cane supply is growing, as more growers elect to supply Isis,” he said.
“In fact, we have signed five agreements from former Bundaberg Sugar growers in the last few months, covering over 700 hectares, and Isis lease and farm additional land ourselves.”
He said the Isis mill was about to release a new cane supply agreement that includes increased pricing choices for growers, including the QSL Seasonal Pool.
“We will soon be talking to growers about our agreement and why our offering is superior,” Mr Gorringe said.
“Growers should not agree to any option until they understand the alternatives and we would welcome talking to any Bundaberg Sugar grower interested in exploring supply to Isis.”