Simon Hood, Wilmar Manager, Grower Marketing
The wash-up of the 2024 season is all but done, with only a portion of growers still to price out the balance of their 2024 crop.
The recent recovery in prices following the dip due to India announcing 1 million tonnes of export quota is welcome. We still see tight trade flow for raw and whites into this quarter which may stretch into the second quarter depending on how quickly Brazil comes back online and the current Indian and Thai crop cut out.
Growers have until 18 April 2025 to finalise their 2024 season Target and GMPRS pricing. We recently released our December quarterly Pool Performance and Comparative Outcomes for the 2024 season. Even with our forecasted pool returns pulling back, due to the fall in the sugar price, the performance of the allocation account is holding firm.
We continue to secure strong physical premiums for the balance of the sugar exported, which will flow back to growers though the net premium in the allocation account. Additionally, we have been able to export more sugar to the US market this season, which increases the percentage of grower’s GEI exposure priced by this lucrative market.
Contact your local Grower Marketing consultant for a copy of the December quarterly report and keep an eye out for our forward pricing analysis – there are some interesting insights for growers who use all mechanisms for GEI pricing. Focusing on the year ahead, we currently have the AUD sugar swap price pushing into the low 600s.
Looking across at our growers who use the Target pricing mechanism, we have a lower percentage of GEI sugar exposure priced than normal for this time of the year. Our current longer-term outlook for prices is not overly optimistic.
While the Indian crop may disappoint this year, we think that next year’s crop will be significantly larger.
Additionally, we have pencilled in another large Brazilian crop for 25/26 as the incentive to maximise sugar over ethanol production increases. If we do see 2025 season prices being dragged up by a rise in nearby prices, growers should have target levels in mind where they would be willing to increase their percentage of price hedging.
With cash flows tight at this time of the year, our Pre-Season Payment is proving useful. Growers who have nominated Wilmar as their GEI marketer for the upcoming 2025 season can take advantage of an advance payment of $5/t of cane. The payment is recouped as cane is delivered to our mills, with interest charged at 6%.
It’s a very easy process and you can nominate online via Wilmar’s GrowerWeb up until 10 May.
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