Wednesday, 15 December 2021
Australia’s largest raw sugar marketer, Queensland Sugar Limited (QSL), has welcomed the World Trade Organisation’s ruling overnight that found against India’s sugar-producing supports and export subsidies.
The WTO panel ruled in favour of a combined complaint by Australia, Brazil and Guatemala, finding that for five consecutive sugar seasons (2014-15 to 2018-19), India’s domestic price support was well in excess of the permitted level of 10% of the value of the season’s sugarcane production. The panel also ruled that India’s export-contingent payments to sugar mills constituted prohibited subsidies.
As a result, the WTO has recommended that India withdraw its prohibited subsidies to sugar mills within 120 days from the adoption of its report and reduce its domestic price support measures to comply with permitted levels.
QSL Chief Executive Officer and Managing Director Greg Beashel said the finding was an early Christmas present for Australian sugar producers after a three-year complaint process hampered by COVID-19 interruptions.
“Australian raw sugar producers are already amongst the most efficient in the world and sell the majority of their product in the highly competitive global marketplace, but when subsidies are allowed to occur they encourage an oversupply that distorts that market, and our producers wear the cost of that,” Mr Beashel said.
“While Australian producers will never be compensated for the potential earnings lost as a result of the Indian subsidy and its associated impact on sugar prices, I’m hopeful that India will abide by the ruling and we’ll avoid the ramifications of this damaging practice for the seasons to come.”
India was the second-largest producer of raw sugar in the world in 2021, producing 30.5 million tonnes. Australia produces approximately 4 million tonnes of raw sugar each year, with 85% of this exported.
For more information contact Cathy Kelly on 0409 285 074
About QSL: QSL (Queensland Sugar Limited) is an industry-owned not-for-profit, providing sugar pricing, marketing and logistics services for the Queensland sugar industry.