27 February 2014
Mackay Sugar media release
Mackay Sugar today announced it has reached agreement with the world’s largest sugar and ethanol exporter Copersucar for the joint marketing of raw sugar into the Asian markets.The agreement will see Mackay Sugar’s marketing body Queensland Commodity Services (QCS) combine a portion of Mackay Sugar’s raw sugar supply with Copersucar’s supply to increase returns on the sugar sold to the Asian markets.
Up until now, Mackay Sugar’s raw sugar has been exported exclusively through Queensland Sugar Limited (QSL); however, with QSL offering marketing rights to other industry players in 2013, Mackay Sugar has opted to export its economic interest sugar (~150,000 tonnes) from 2014 via QCS, leaving 300,000 tonnes of sugar to be exported via QSL.
Mackay Sugar Chief Executive Officer Quinton Hildebrand said that whilst Mackay Sugar remains a strong supporter of QSL, Mackay Sugar had to safeguard its export marketing and part of this need is to establish an alternative marketing channel outside of QSL.
“The agreement with Copersucar strengthens the long term interests of our company and our supplying growers, given the uncertainty of the traditional export marketing arrangements.
“Specifically, the agreement establishes our own access to the Asian markets and enables us to improve export returns with higher premiums and profit sharing arrangements on the gains achieved leveraging the supply from both origins into the Asian markets.
“The agreement offers our company full transparency on all sales into the Asian markets, as well as allowing us to access information on Brazilian production and global trade flows. This will greatly assist QCS in the pricing of all Mackay Sugar’s production which is hedged on the Inter Continental Exchange No.11 (world market) for raw sugar.
“We have chosen to partner with Copersucar because of the superior value proposition they present and also the similarities in our ownership structures and culture – Copersucar’s ownership also originates from a co-operative of millers with extensive cane growing interests,” Mr Hildebrand said.
Copersucar’s footprint of 47 mills covers the length and breadth of the Brazilian cane growing regions, with the company marketing 9 million tonnes of sugar annually and accounting for 11% of global sugar exports.
The agreement between Mackay Sugar and Copersucar will be effective from the 2014 Season.