2020 SEASON & COVID-19
There have been a number of communications issued from Wilmar and QSL over recent weeks providing updates of practices and processes that have been put in place in order to minimise the impact of COVID-19. Updates, which included “ QSL frequently asked questions” have been uploaded to our web page for members information.
KCGO posed a number of questions to both QSL and Wilmar that were relevant to the storage and export of raw sugar from the Burdekin region through STL’s Townsville facility. Q & A response received from QSL is detailed below, some of which has also been addressed in their recent communications to growers. Wilmar are yet to provide a formal response to questions posed with their current efforts, as a first step, in having State/Federal Government to officially recognise the Sugar Industry as an “essential service” .
KCGO is also aware peak industry bodies in conjunction with Dept of Agriculture and Fisheries have formed working groups to investigate various scenarios and possible impacts to the sugar industry during these uncertain times. QSL, ASMC, STL and CANEGROWERS are known to be participating. Matters being addressed include but not limited to:
• Workforce availability
• WHS
• Business Continuity
• Supply Chain and Logistics
Questions that QSL have responded to are:
• Will there be any residual 2019 sugar remaining in QSL’s Townsville STL terminal storage facilities as of commencement of 2020 season?
At this stage, QSL expect that there will be something like two cargoes left in stock (60,000 tonnes) depending when the season starts. This is quite normal.
• What is the storage capacity of STL Townsville facilities?
The terminal at Townsville can hold 770,000 tonnes of which allocation to QSL/Wilmar is roughly 50/50. Have confirmed with STL storage capacity of its four sheds is approx. 750,000 tonnes (Shed 1- 130kt, Shed 2- 150kt, Sheds3/4- 470kt). This combined holding capacity represents 66% of the Burdekin crop.
• Availability of shipping fleet? Obviously QSL has no control over overseas ships being prohibited from entering Townsville port due to contamination etc.
The Australian government now requires that all ships must be at sea for 14 days before they can enter an Australian port. QSL supports this new regulation and thinks it is a sensible approach. QSL are not envisaging any problems with lack of availability of ships (quite the opposite actually) however remain cautious as to which shipowners are used given very low freight rates and shipping companies solvency.
• Continued availability of access to traditional markets. Is there likelihood of reduction import of sugar from QSL’s traditional customers eg. Korea/Japan etc.
QSL customers are indicating that they are not expecting that shipments will be delayed or seeing any significant demand changes. Some of QSL customers are of the opinion that demand is increasing. QSL believe they
may see some issues with individual markets having to stop refineries because of labour or essential services shortages. Fortunately QSL have much more demand for its sugar than they have supply and expect to be able to supply other customers if there are problems in individual markets.
• If governments of overseas markets shut down and/or restrict port access what would be the implications for QSL.
As per the earlier answer total storage of 770,000 tonnes is available at Townsville. QSL can also use floating storage on ships but doesn’t think that will be necessary as all markets would have to be shut simultaneously for that to happen.
• Shortfall in QSL port terminal staff due to virus infection and subsequent implications.
QSL are splitting up their teams (as many other businesses are). QSL is also fortunate that they have a team of 48 casual workers (mostly ex-employees) who can assist in the loading of ships.
• Any other contingencies that have been put in place to address other matters should there be a negative impact as a result of CoViD19.
Other things QSL are doing include locking down committed funding lines, not discharging sugar from ships until payment is made, separating critical staff so one infection will not impact others, cautious approach to capital and maintenance works so QSL don’t get put in a position of not being able to load ships or receive sugar, restrictions on travel and use of public transport by staff, working from home, social distancing rules, enhanced office cleaning etc.
As further information comes to hand members will be advised accordingly via web page.
Unfortunately we (growers, contractors, millers, marketers) are all in unchartered territory in relation to CoViD19 which is changing on a daily basis.
Should members have any questions/concerns Paul Giordani has sought collectives assistance to collate on growers behalf and forward to Wilmar who will respond in a coordinated manner.
Les Elphinstone
Manager KCGO