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SUGAR CANE CRUSH EXPECTED TO TOP LAST YEAR’S OUTPUT

Wilmar’s Kylie Newman spoke with children recently at the Ayr kindergarten about the upcoming crush

Wilmar Sugar

AN estimated 7.97 million tonnes of sugar cane is set to be crushed during the upcoming crush.

If that target is met, it would beat out last year’s total of 7.91 million tonnes of sugar cane that were processed in the region.

Last year’s total output in the Burdekin was dampened slightly by dry conditions, with Invicta Mill the last outpost in the Burdekin to crush out, finishing up on November 15.

Expected to start on Tuesday, June 8, the crush operations are not expected to be impeded by the closure of the Burdekin River Bridge on Monday, June 7, according to Wilmar’s Burdekin Regional Operations Manager Paul Turnbull.

“The Department of Transport and Main Roads consulted us about the upcoming bridge closure and its potential impact on our start of crush operations,” Mr Turnbull told Burdekin Local News when asked about potential delays.

“We have advised our employees of the closure so they can plan around it.

“We do not envisage any major impacts on our people or our operations.

“Our four Burdekin mills are on track to start the 2021 crush on Tuesday, June 8.”

Cane trains are already on the move preparing for the upcoming crush, with Wilmar sugar urging residents to be aware of the risks posed by them as locomotives cross the Burdekin region.

Burdekin Cane Supply Manager John Tait says the vehicles are already delivering bins for cane rail sidings throughout the region, and that residents should be aware as the crush gets underway.

“It’s really important that people approach level crossings with caution and look out for cane trains.

“We’ve had a few months without cane train activity and people naturally become complacent. With the crushing season now just days away, we’re urging residents and visitors to switch their train brains back on,” John said.

Kylie Newman, Wilmar’s Community Relations Manager, was on hand to educate children about the dangers of cane trains and the railway tracks that criss-cross the region.

She spoke with the Ayr Community Kindergarten about the dangers present when being careless near cane trains.

“We really want our youngest community members to understand just how heavy cane trains are and how much time they take to stop,” Ms Newman said.

“A locomotive weighs about the same as a humpback whale and a cane bin is about the same weight as an elephant.”

$5 million spend boosts Inkerman mill ahead of crush

Daniel Shirkie

INKERMAN Mill has received a $5 million spend aimed at boosting it’s capabilities ahead of the start of the sugar crushing season.

A No. 6 Bagasse Conveyor was constructed at the Inkerman Mill facility in the middle of May, replacing an aging conveyor that was no longer usable by the team.

Designed entirely in-house at the Inkerman Mill, the commission for the conveyor belt was completed in May, with a modular construction method that allowed the construction crew to easily install the brand new conveyor belt within the mill itself.

Further upgrades to the mill’s facilities were also completed in the lead up to the crushing season, with a $1.9m boiler automation project among the range of facility upgrades.

That came as part of a wider upgrade of Wilmar’s eight mills across the country, with the organisation working to ensure boiler stations across all their facilities operate reliably.

The work involved replacing an outdated control system with a more modern programmable logic controller.

The boiler electrical supply was also upgraded, with $1.2 million earmarked for that purpose under the array of upgraded technology.

The upgrades are expected to improve reliability of the power supply to the mill’s

Wilmar Sugar’s Deon Darr with the new Bagasse conveyor

boiler station. $700,000 was set aside to replace major components that formed part of the B-side cane carrier at the facility, with the money aimed at improving the functions and reliability of the B-side milling train.

The Mill itself is expecting around 1,715,000 tonnes of sugar cane throughout the 2021 season, with the crush set to begin on Tuesday, June 8 and run all the way through to November 17 under the current plan.

QSL Market Update

current as of 2 June 2021

Sugar

• It was a slow start to the week for the ICE11 market before raw sugar prices improved on Friday off the back of the

Brazilian government announcing a water emergency alert for five Brazilian states. The prompt July contract pushed as high as 17.69 USc/lb before closing the week at 17.36 USc/lb. • After a slow first month of the Brazilian crop, UNICA data from the first half of May shows production has accelerated as we move into the body of the crop. The third report of the 2021 Season surprised the market to the upside, with all categories reporting higher-thanexpected results. As of 16 of May, cane harvested was 86,309 million tonnes and sugar 4,529 million tonnes. • Ethanol parity continues to provide strong support for sugar prices, with spot parity sitting around 16.60 USc/ lb and expected to remain in an approximate 15-16 Us/c range in the next three months. • A 217,000 lot net-long position was printed in the

Commitment of Traders report dated 25 May. This is slightly lower by 16,000 lots week-on-week, indicating speculators are still closing out their position. On a live basis, the specs are likely to be in a higher net-long position after the rally on Friday night and a strong start to the current week. This position will be closely watched as we move towards expiry of the July contract.

2021-SEASON HISTORICAL ICE 11 CHART

This is a whole-of-season ICE 11 price chart for the 2021 Season, based on the current 1:2:2:1 pricing ratio applicable to QSL Target Price Contract growers. Source: Bloomberg

Currency

• Another stable week for currency saw the Australian dollar trade in a similar 77 - 78 cent range for yet another week, only briefing dipping out of this territory on Friday to a low of 76.77 cents. • The AUD was lifted on Wednesday by New Zealand dollar strength when the Reserve Bank of New Zealand meeting was surprisingly hawkish (see our Jargon Buster) as they announced a series of forecasted rate hikes. The official cash rate in NZ remains the same as Australia, steady at 0.25%, however is now predicted to be raised in

Q3 2022. • Brent crude oil prices gained a respectable 3.1% week on week, up to $68.48/ barrel after Goldman Sachs estimated short term demand would be strong and reported a price target of USD80bn for the commodity.

To read our full commentary in the QSL Market Update, please visit www.qsl.com.au or contact the Burdekin QSL team: Russell Campbell, Grower Relationship Manager 0408 248 385 Kristen Paterson, Grower Relationship Officer 0438 470 235 Rebecca Love, Grower Relationship Officer 0429 054 330

This report contains information of a general or summary nature. While all care is taken in the preparation of this report, the reliability, accuracy or completeness of the information provided in the document is not guaranteed. The update on marketing and pricing activity does not constitute financial, investment advice. You should seek your own financial advice. Nothing contained in this report should be relied upon as a representation as to future matters. Information about past performance is not an indication of future performance. QSL does not accept any responsibility to any person for the decisions and actions taken by that person with respect to any of the information contained in this report.