Forward pricing is something the Australian sugar industry is fortunate to have access to – there are very few other industries and commodities that have this option. Mackay growers were the first in Australia to be able to individually forward price, and have had access to innovative and flexible forward pricing arrangements for many years.

But why should you consider forward pricing?

Forward pricing is a valuable tool for growers. It provides price certainty for growers for up to four years ahead of the current season, and also helps smooth cashflow. ‘Locking in’ a proportion of your crop at a given price can be important not only for day-to-day business management, but also to access finance and plan for the future.

In some years, in-season prices will outperform the forward pricing average, and growers that don’t forward price will receive a higher price than those that forward priced a proportion of their sugar. However, growers that don’t forward are taking a risk that the in-season price will be higher than the price over the pricing window for that season. Forward pricing involves pricing over a potential five-year window, rather than the one-year window for in-season pricing.

Achieving ‘the’ highest price is not what good risk management is about – and forward pricing helps manage volatility and achieve returns that keep cane farming viable. Five years is a very long time in the raw sugar market. In that time, prices can go from high to low and back again, sometimes more than once! 

QCS’ forward pricing options are flexible and simple for you to manage. We don’t require you to work out contract expiries or price in specific amounts – unless you want to do so, of course. Features include:
  • You can price up to four seasons ahead of the current season, within the limits for the relevant season
  • Sugar is committed for the relevant season once it is priced. Until then, you can add or remove tonnage
  • Sugar that is not priced during the pricing period for the relevant season becomes in-season tonnage
  • You can let QCS manage the pricing and marketing decisions for you or control your own pricing outcomes.

If you want to manage all your own production risk (less your US Quota allocation), you can do so via the QCS Grower Managed Pricing pool (subject to eligibility criteria).

FIND OUT MORE

Browse our forward pricing page, or contact QCS Grower Services Officer Arthur Douglas on 0447 534 791 or via email.