2023 Pool Terms: GMP

POOL SNAPSHOT

TERMS

Objective

Grower Managed Pricing allows individual Participants to manage their own GEI sugar price risk (less US Quota allocation) under an agreement with QCS.

2023 Season sugar that has been committed elsewhere (by forward pricing) is not available to price in Grower Managed Pricing.

Participant eligibility

To be eligible to nominate sugar to Grower Managed Pricing, you must have:

• a production estimate of at least 300 IPS tonnes of GEI sugar available for the 2023 Season*
• a good production and credit history with Mackay Sugar, as determined by QCS in consultation with Mackay Sugar
• a Grower Pricing Agreement with QCS.

* You may nominate sugar from one or more farms, provided the total amount of sugar nominated is at least 300 IPS Tonnes. You cannot ‘split’ the sugar production of a single farm between Pools.

If you do not have a production and/or credit history with Mackay Sugar (e.g. new entrants to cane growing in the Mackay region), you may be eligible to participate based on an assessment of evidence of creditworthiness, at the discretion of QCS and Mackay Sugar.

Characteristics

Grower Managed Pricing is optional. You do not have to participate in this Pool.

QCS manages your US Quota and your share of QCS costs is paid through the Shared Pool.

QCS is the marketer for sugar in this Pool (i.e. QCS is responsible for the physical sale of the sugar, including its shipping).

Pricing Declaration Date

30 April 2023 is the latest date by which you can elect to participate in this Pool.

Pricing Period

Pricing in this Pool will be undertaken at your discretion until 20 April 2024. Pricing is subject to the Discretionary Ratio outlined below (i.e. you must price a certain quantity by each contract expiry date throughout the Pricing Period).

Pricing will be executed by QCS on your instruction or the instructions of your nominated pricing manager.

Discretionary Ratio

1:2:2:1 against the Jul:Oct:Mar:May contracts.

QCS agrees to accept pricing instructions from you (or your nominated pricing manager), to be applied against your nominated sugar.

If pricing as per the Discretionary Ratio is not completed within seven (7) Business Days prior to the relevant contract expiry date, QCS will complete the remaining pricing for the contract at market close on that day (i.e. on the day seven Business Days prior to the expiry date).

As an example: The 2023 Season July contract expiry date is Friday 30 June 2023. If the quantity of sugar nominated to this Pool is 300 IPS Tonnes and, by Wednesday 21 June, seven Business Days prior to the expiry of the contract, you have priced 30 IPS Tonnes, QCS will price an additional 20 IPS Tonnes at market close on 21 June to achieve the July contract Discretionary Ratio of 50 IPS Tonnes.

Minimum tonnage

At least 300 IPS Tonnes of GEI sugar less US Quota allocation.

Once you advise QCS of the farm/s that will be participating, you will be notified by QCS of your estimated production for this Pool. Once notified to you, the Pool estimated production may only be varied by mutual agreement (between you and QCS) in writing.

Maximum tonnage

Your total allocation to this Pool cannot exceed 100% of the GEI Sugar that you nominate to supply to QCS for the 2023 Season.

Pricing decisions

You, as the participant, are responsible for pricing decisions for the tonnage in this Pool.

You may choose to nominate and use a pricing manager. Your nominated pricing manager acts on your behalf, and you are responsible for all costs and expenses relating to the use of a pricing manager.

QCS is responsible for exercising your pricing decisions. Any new price instruction, or any variation or cancellation of a price instruction must be received before 2.30pm on any Business Day to take effect for potential pricing (or variation or cancellation of potential pricing) overnight.

All pricing instructions must be provided in, and all pricing in this Pool will be completed in, Australian dollars per IPS Tonne.

There is a 10-tonne minimum for each pricing order.

You can provide price instructions to QCS via telephone (to Arthur Douglas on 0447 534 791) or email (to or ). If you instruct QCS by telephone, you will receive an email (to your nominated email address) confirming your instructions. This email will be assumed by QCS to be an approved instruction unless you notify QCS otherwise prior to 2.30pm on the Business Day on which the email is sent to you.

Fees, costs and deductions

All costs and expenses associated with the operation of this Pool will be allocated in accordance with the Shared Pool terms.

Pool performance

The performance of this Pool is not reviewed by QCS.

Individual production risk

Tonnage allocated to this Pool is considered Committed Sugar once priced. Committed Sugar must be supplied by you regardless of production variations. 

Production and delivery risk rest with you.

If you fail to deliver Committed Sugar, the financial consequences of unwinding pricing positions or cancelling sales will be passed directly on to you. These financial consequences could be positive or negative depending upon the market conditions at the time of unwinding the pricing positions. This ensures other Suppliers to QCS are not impacted by any individual’s failure to deliver Committed Sugar.

Definitions

The definitions in the pricing pool terms have specific meanings, and you should ensure you understand these meanings prior to making GEI marketing decisions. You can read a description of the definitions used in the pricing pool terms here.

Need more information?

Contact QCS Grower Services Officer Arthur Douglas on 0447 534 791 or by email.