SYDNEY, June 25 (Reuters) - Australian sugar growers on Thursday rejected a marketing proposal from the country’s largest sugar processor Wilmar International Ltd, saying it does not guarantee top prices, and called for laws that give them a say in exports.
Wilmar, MSF Sugar, owned by Thai sugar giant Mitr Phol , and the Australian unit of Chinese agribusiness COFCO Corp plan to stop selling sugar through the industry-owned marketing body from 2017.
Australian sugar is currently controlled by an independent entity, Queensland Sugar Limited. The three processors want to bypass the industry body and use their own exporting arm, which they say will allow them to control their supply chains and maximise revenues.
But the move is unpopular with sugar farmers in Australia, the world’s third largest exporter of raw sweetener.
Sugar cane must be processed within a day of being harvested and with no alternative millers nearby, growers say they have no choice but to sell to the three processors and have little assurance on crop prices.
“An Australian sugar farmer should have free choice in his economic destiny and the Wilmar proposal does not allow that,” said Steve Guazzo, chairman of the industry body, CANEGROWERS.
Wilmar’s proposal includes the creation of a committee of farmers that would have access to information on all its Australian sales, designed to reassure farmers over returns.
But canegrowers has rejected the proposal.
The industry believes it has the support of Australian lawmakers, with a Senate committee set to propose a mandatory code of conduct for the industry that would give canegrowers control over the sale of two thirds of raw sugar produced by foreign-owned sugar mills in Queensland.
If such a proposal if it became law would prevent the processors creating their own Australian export body.
“Wrapping the sugar industry in government red tape is simply unnecessary and would have a significant negative financial impact on cane growers and sugar millers,” said Shayne Rutherford, executive general manager, strategy and business development at Wilmar.
Australian canegrowers have called on the conservative government to back them, but while it relies on the rural vote, it is unclear whether it will enter the dispute.
Australian Foreign Minister Julie Bishop has written to Queensland’s state government, where much of the country’s sugar is grown, to reject any moves to legislate how sugar is marketed, according to local media.
“It is important that Australia continues to maintain a credible reputation for being an effective and reliable partner with an exceptional record of compliance within the terms of our international trading agreements,” Bishop wrote.
Reporting by Colin Packham; Editing by Michael Perry