Australia's sugar industry: operating in a free-market environment.

Abstract

This chapter provides insights into the workings of Australia's sugar industry. It also looks into the distorted market in which the industry operates, and explores the benefits that a freer trade can bring. Also presented is an overview of the evolution of Australian sugar policy, from intervention towards deregulation. Trends in sugar production, milling, refining, marketing, consumption, and trade are discussed as well. The chapter concludes with an outlook for Australian sugar.

Sugar Policy Reform in the European Union and in World Sugar Markets

“…This outcome is at the lower end of the scale of potential benefits arising from more liberalised trade, particularly in OECD countries as shown by a number of other studies. For example, Sheales, et al (1999) projected a world market price rise of between 5% and 41% depending on the extent of liberalisation. Other studies revealing large benefits include Borrell and Pearce (1999), CIE (2002) and USITC (2002).…”

Sugar Policies Opportunity for Change

“…3 For the 2001 marketing year, the minimum price was 17,040 yen per ton ($131 per ton) for sugar beets and 20,370 yen per ton for sugar cane ($157 per ton). Australian sugar cane producers, which receive no government price supports, received $16 per ton in the 2001 marketing year (Sheales 2002). The MAFF also sets the raw sugar price for domestic refiners, known as the "domestic sugar rationalization target price," at a level intended to allow restructured sugar refining firms to pay the guaranteed minimum price to sugar cane and beet producers and still recover costs.…”