Sugar cane harvesting at Gregory River near Proserpine.
Sugar cane harvesting at Gregory River near Proserpine. Peter Carruthers

Sweet deal on the way

AUSTRALIAN sugar exports to Indonesia could potentially more than triple after a 3% tariff reduction was secured between the two countries.

This is the view of Federal Trade Minster Steven Ciobo who praised the outcome from Jakarta on Wednesday.

"This provides the opportunity to increase our exports to Indonesia to more than 1.25 million tonnes from their present level of 350,000 tonnes - that's worth AU$500 million,” he said.

"Removing a barrier to trade with our nearest neighbour is a great outcome for the Australian sugar industry and our Indonesian customers.”

This lowers the tariff on Australian sugar from eight to five per cent.

Australian Sugar Industry Alliance chairman Paul Schembri said this deal would put Australia on a level playing field with Thailand.

"We look forward to Indonesia being restored as a major export destination for our raw sugar,” Mr Schembri said.

"We went from supplying around a third of Indonesia's sugar imports to almost nothing (due to the 8% tariff).

"The final steps are now being taken to level the playing field and reduce the tariff on Australian sugar to 5%.

"A 3% tariff cut is a good outcome for Australian farmers and millers and for Indonesian refiners who want access to our high-quality product at a competitive price.

"We thank the Prime Minister, Trade Minister and their officials and representatives for their hard work on our industry's behalf.”

Canegrowers Proserpine manager Mike Porter said while the tariff reduction wouldn't have a huge impact across Proserpine, it was good news in the "overall scheme of things”.

"Proserpine growers won't notice a huge difference, but the lowering of the tariff is good news in general,” he said.

"It will open up new markets and new customers for us which is great.

"The advent of new customers creates more demand for our product.”

The bilateral deal is expected to be finalised shortly with a November deadline set.