Sydney, Aug 20 - Australia's raw sugar industry is facing another gloomy year as it struggles with wet weather, low sugar content in cane and mill stoppages.
And the only sources of solace for the industry are firm international prices -- New York sugar <SBc1>is trading around 13.67 cents per pound -- and expectations of further declines in the Australian dollar, a leading industry figure said.
"It's looking very encouraging, in the 14-16 cents range," said Ron Mullins, deputy general manager of the Canegrowers organisation, adding that a weaker Australian dollar was also good for Australia, as a major exporter.
"We hope that trend continues because that's possibly going to be the only bright thing on the horizon this year."
New York benchmark sugar prices have averaged 9.19 cents a pound since 2000, while the Australian dollar <AUD=> has tumbled over 10 percent since mid-July.
Australia is normally the third-largest sugar exporter after Brazil and Thailand, but it has been hit by years of adverse weather which has kept production of "raws" below 5 million tonnes.
But with the harvest now almost one-third over, the main sugar state of Queensland is expected to produce between 4.0 million tonnes and 4.5 million tonnes of sugar from 31-32 million tonnes of cane, Mullins estimated.
Including production from New South Wales, Australia's total sugar production is likely to be between 4.3 million tonnes and 4.8 million tonnes, Mullins said.
This would compare with 4.96 million tonnes in 2007/08, and well down from a forecast of 4.97 million tonnes for 2008/2009 nationwide by the Australian Bureau of Agricultural and Resource Economics (ABARE).
"I think it's optimistic," Mullins said of the ABARE forecast.
Sugar content was down on previous years after heavy rain. And repeated rain delays and mill outages this year were raising questions about whether all of the cane crop could be harvested in some areas.
"All going well, we will get it off, but any more rain, particularly in areas like the Burdekin, will mean cane could be left in the field," he said.
Even if the harvest is complete, it would be late, and certainly run into December in worst-affected parts.
Mills in the key production region of Burdekin, around Townsville in north Queensland state, last week resumed operation after more shutdowns which followed torrential rain knocking them out of operation for the last two weeks of July.
CSR Ltd.'s Pioneer mill, in the same region, also re-started production on Wednesday after being shut down since June 20 because of an industrial accident.
The mill, which crushes around 1.7 million tonnes of sugar cane a year from Queensland's total cane crop of around 32 million tonnes, is one of 23 mills operating in the state.
It will be at full production in a few days' time, CSR said. But production losses will be inevitable, industry leaders said.