Fed: World sugar prices to fall 18 per cent: ABARE

AAP General News (Australia)
12-18-2001
Fed: World sugar prices to fall 18 per cent: ABARE

CANBERRA, Dec 18 AAP - Australia's beleaguered sugar industry faces an 18 per cent
fall in international prices, the nation's chief commodities forecaster said today.

The Australian Bureau of Agricultural and Resource Economics (ABARE) said the world
economic slowdown and oversupply from the world's biggest sugar producer, Brazil, would
force down prices.

But it was not all bad news for Australian producers who were able to forward sell
their crop ahead of the expected drop in prices, ABARE said.

Australian producers have suffered in recent years from bad weather and an onset of
the disease orange rust.

ABARE said world sugar stocks would remain high this financial year, but with the global
economy slowing, consumption was expected to fall.

"A combination of weaker demand resulting from reduced economic activity, and higher
than expected Brazilian production, mean that supply will expand faster than consumption
in 2001/2002," it said.

The total area under sugar cane in Australia is expected to increase 1.5 per cent to
417,000 hectares.

Production should increase 12 per cent to 4.6 million tonnes, while the value of exports
should improve 1.4 per cent to $1.1 billion.

AAP sw/daw/cjh

KEYWORD: ABARE SUGAR

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