What should you take into consideration when choosing a GEI marketer for your GEI sugar?

The short answer is that you should choose the GEI marketer that you believe will give you the best price for your cane.

The price you receive for your cane is made up of a number of components, including costs and revenues such as regional premiums and storage and handling costs.

The pricing and foreign currency exchange (FX) decisions of your GEI marketer make up the overwhelming majority of the final return. Here’s an example:

  Marketer A Marketer B Marketer C
Pool price          543          516          500
Premiums            11            10            11
Loyalty bonus              0              0              2
Costs          (16)          (12)          (14)
Bottom line return to grower        $538        $514        $499

In the above example, a grower may be persuaded to choose Marketer B because its costs are the lowest, or marketer C because it offers a loyalty bonus (which amounts to 0.5% of the total return). However, Marketer A provides a better overall return.

This doesn’t mean costs are irrelevant. Every cost your marketer incurs is paid by growers through per-tonne shared pool costs or marketing fees, so you want your marketer to work hard to keep costs low, in order to maximise your returns. Marketers passing on ‘savings’ on the basis that they’re an income-tax-exempt organisation, for example, doesn’t benefit you if their costs are still higher than those of marketers that don’t have the same tax status.

FIND OUT MORE

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