The IbisWorld report predicts the sugar industry will grow faster than the farming, oil and gas and construction industries.

Senior analyst Naren Sivasailam says a combination of rising sugar prices and renewable energy options will see a 15 per cent rise in revenue.

“Brazil is the single largest producer of sugar in the world with India being a close second, and over the last year or so they’ve had poor weather conditions that have drastically reduced supply which has greatly increased prices,” he said.

“Also the demand for ethanol as an alternative source of fuel has also greatly increased the demand for sugar in ethanol production.”

Mackay Sugar chairman Eddie Westcott says the weather will determine how much local growers will benefit.

“We always knew that this coming year would be reasonably priced again and it will still yet depend on our crop,” he said.

“If we do get a good crop, for this district say six million tonnes, yes that report will prove to be correct – but it things go wrong with the weather for the next few months and we don’t', well it’s just going to be an average year for us.”

The demerger is the “preferred option” and is in the best interests of shareholders, Sydney-based CSR said today in a statement after studying the Bright Food proposal. Chen Chunshan, group company spokesman for Bright Food, couldn’t immediately comment when contacted in Shanghai.

CSR, Australia’s second-largest maker of building products, has been seeking to sell the sugar business to take advantage of surging prices. The unit may be a target for companies such as Bunge Ltd. and Cargill Inc., RBS Equities (Australia) Ltd. said this week. An enterprise value of more than A$1.5 billion was “entirely conceivable,” the bank said.

The full story from Bloomberg.

photo by Robert Rough, Brisbane Times

A $1.5 billion bid for Australia’s main sugar refiner, CSR, by one of the world’s biggest food companies is a precursor to the next wave of Chinese investment in Australian assets, reports the Brisbane Times.

But the bid by Bright Foods, owned by the Shanghai municipal government, will pose a political and regulatory challenge to the Federal Government.

Media reports suggest the Government is exploring how to make its foreign investment regime less burdensome for Chinese state-owned companies, while preserving screening rights on genuinely strategic investments.

Advisers and executives say property, financial and other services, rare earths and other metals for electronics processing, and the giant natural gas fields off north-western Australia are likely to be targets for the rivers of Chinese cash that began flowing into Australian mining assets two years ago and which are now spilling into the wider economy.

The aggressive investment strategy is backed by Beijing. Last month the Central Economics Work Conference encouraged companies to ”go out” and invest overseas.

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