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Certainty of supply helps QSL maximise returns

Tuesday, 03 July 2012

This column I am happy to announce that on 30 June, the six milling partners due to roll over their existing Raw Sugar Supply Agreements (RSSAs) this year have done so, and will supply raw sugar to QSL until at least the end of the 2015 season (30 June 2016).

RSSAs are the supply contracts which allow QSL to pool raw sugar from mills and market it for export. Mills contract to supply raw sugar to QSL on a rolling three-year basis.

We anticipated these six clients would opt to roll over and we are pleased that we now have confirmation of their choice to continue partnering with QSL.

Our members’ choice recognises the value and benefits QSL delivers to the Australian sugar industry and we are happy to continue our strong relationships with milling partners moving into the future. Extending these RSSAs gives QSL a certainty of supply that reinforces our ability to maximise returns for our members.

We continue to see ongoing strong demand for Australian raw sugar in the Asian region and our ability to deliver on this demand, create value for our members, and maximise returns is done by providing consistent and cost-effective access to:

  • The highest returning raw sugar markets in the Asia-Pacific region
  • Competitive and value-adding activities in pricing, financing, marketing and logistics

QSL sells the majority of our raw sugar to Asia, where Australian sugar commands a price premium due to its consistently high quality and our proximity to Asian markets.

QSL’s robust pricing, financing, marketing and logistics services are the other half of this equation and they help us deliver value for our members. QSL’s capabilities in these areas are unique because of our structure, risk management and pooling system.

We continue to work hard in these areas to ensure the best possible outcomes for Australian sugar millers and growers.

We are close to finalising the 2011 season pools.  Expected gross prices on an IPS per tonne basis are:

Seasonal Pool - $515

Actively Managed - $693

Guaranteed Floor Pool - $480