SYDNEY, June 30 The Australian unit of Chinese
agribusiness COFCO Corp will stop selling sugar through an
industry-owned marketing body from 2017, part of a shake up of
the export model in the world's third-largest shipper of raw
The move by Tully Sugar Limited comes after Wilmar
International and MSF Sugar, owned by Thai sugar giant
Mitr Phol, announced they would terminate agreements with
industry-owned marketing body Queensland Sugar Limited (QSL).
A move away from a single marketing desk is being resisted
by the growers that supply exporters as they say pricing could
become less transparent.
But Tully Sugar said that after Wilmar and MSF had announced
their departures it had little choice but to follow.
"The recent decisions by Wilmar and MSF Sugar to terminate
their agreements at the end of the 2016 sugar season means that
QSL loses more than 70 per cent of its critical export mass and
its competitive marketing advantage," said Alick Osborne, chief
executive of Tully Sugar.
"This presents unacceptable risks to our business and our
Wilmar has said it decided to leave QSL as it should be able
to achieve better pricing through its own marketing arm. MSF
said it was concerned about the future of QSL without Wilmar.
The exit of the three largest sugar processors raises doubts
about the future of the traditional single desk sales model.
QSL said it acknowledged a desire for a new marketing
framework, but said a collaborative model was needed to avoid a
collapse in the confidence of growers.
CaneGrowers, the industry body for Australian growers,
described moves away from a single sales body as "farcical"
because it would remove transparency for growers.
Australia is expected to produce 4.6 million tonnes of sugar
during the 2014/15 marketing year, the Australian Bureau of
Agriculture, Resource Economics and Sciences said earlier this
(Reporting by Colin Packham; Editing by Joseph Radford)