Sugar: Outlook to 2006-07

World sugar prices are forecast to average significantly lower in 2002-03, reflecting current high levels of stocks and expectations of a record sugar crop in Brazil. Australian sugar production is forecast to rise by 15 per cent to 5.3 million tonnes in 2002-03, but then to increase by only a further 8 percent to 5.7 million tonnes in 2006-07. Grower earnings are forecast to be lower in 2002-03, with a forecast fall in Australian unit export returns more than cancelling out the effects of higher yields and a bigger sugar cane crop. Achieving further cost efficiencies and productivity gains will be a high priority for growers over the next five years, with the Australian sugar industry facing increasing competition in traditional markets from an expected rise in low cost exports from Brazil.