Simon Hood, Wilmar Manager Grower Marketing
As the pricing nomination date for the 2025 season passes there are a couple of notable trends emerging
in the ways growers are approaching their GEI sugar price management.
Firstly, we are seeing a drift away from growers managing the price risk themselves and going back to
the pools.
Interestingly we have seen our first drop-off in growers choosing to manage their GEI pricing exposure
with the popular GMPRS product. In the same vein, we have a significant increase in the tonnage
committed to our Production Risk Pool.
A contributing factor to this trend is the continuing volatility in prices. This is creating pricing fatigue
amongst growers whereby the challenge of setting price levels creates doubt in their minds. No doubt the
consistent outperformance of our Production Risk Pool would also be influencing growers, but this may
not always be the case.
The other notable and linked observation is the level of forward coverage growers have for this season
and beyond. Broadly speaking, for growers who chose to use the Target pricing mechanism, around 30
per cent is locked in for the 2025 season. This is well down on previous seasons.
One factor influencing this outcome would be the late finish to the 2024 crush and extreme wet season,
leading growers to be cautious about expected production this year. Our recently released crop estimate
validates grower caution on production expectations.
The other factor is the absolute price level which has been under pressure most of the year. Coming out
of a period of relatively high sugar prices, growers may have to adjust down their expectations for the
balance of their price exposure.
Given this drift away from independently managing price risk, we have opened our Managed Pool Plus
early for 2026 season nominations. We will be accepting commitments from now through to 30 June
2025. This allows us to manage the price exposure over a longer time frame to take advantage of price
opportunities.
We recently completed a detailed review of the 2025 Season Managed Pool Plus and so far, the pool is
performing well above benchmark pricing, which is a good outcome for our growers.
The performance of the Production Risk Pool over the past three years is a significant factor when
growers choose how to price their GEI Sugar exposure
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