The Short Term Pool is the in-season pricing managed by QCS. We manage in-season pricing as a single pool, that may comprise a number of components, based on our view of the market for a particular season.
QCS also manages production risk within the structure of the Short Term Pool. We don’t require growers to commit a percentage of their in-season production to a separate production risk pool.
QCS has stringent requirements for managing production risk, which include only selling certain quantities of sugar once that sugar is produced. The QCS risk management policy is approved by the QCS and MSL boards and executed by an experienced pricing team.
Additionally, as a part of Mackay Sugar, QCS is in a unique position to monitor production risks for Mackay growers. QCS works closely with Mackay Sugar’s milling operations to ensure information about every aspect of the harvest and the crush is up to date. Grower directors have a significant presence on the Mackay Sugar and QCS boards, providing valuable insight into conditions in the Mackay region. And because QCS is managing the sugar for a specific region, pricing strategies are tailored to suit regional conditions.
Under the cane supply agreement between Mackay growers and Mackay Sugar, a Shared Pool component (US Quota pricing plus/less QSL and QCS revenues and expenses) is also applied to approximately three per cent of in-season tonnage.