Lower World Sugar Prices Forecast

CANBERRA - Mar 2/05 - SNS -- Lower world sugar prices are expected in 2005-06 in response to bigger Brazilian, Indian and Thai crops, says Dr Jammie Penm, Senior Economist with ABARE (Australian Bureau of Agricultural and Resource Economics).

Speaking at the Outlook 2005 conference here, he said strong expansion in Brazil's sugar industry is forecast to result in downward pressures on world prices in real terms over the outlook period.

"In the dominant Centre-South region of Brazil, the area planted to sugar cane has the potential to increase many times from current levels," said Dr Penm, "and there is little to suggest that Brazil's expansion will slow."

Luiz Carlos Corrêa Carvalho from the Brazilian National Chamber of Sugar and Ethanol explained the evolution of Brazil's huge sugar and ethanol industries, and painted a bright future for the sector.

"Ethanol production in Brazil will increase significantly to 2010," said Carvalho.

Australian cane grower, David Cox, from the Burdekin region of Queensland presented his ideas on future directions and challenges for the Australian sugar industry.

Cox indicated that the Australian sugar industry was unlikely to survive persistently low world sugar prices. He endorsed the use of substantial policy interventions to achieve long-term sustainability for the Australian sugar industry.