The Australian and Thai sugar industries, strong competitors on Asian export markets, are forging an agreement for Australian raw sugar to be refined in Thailand for re-export.
After a meeting of the Thai-Queensland Sugar Industry Dialogue in Brisbane, the two groups said in a statement on Monday that they were asking governments of both countries to establish regulations to back the scheme.
An Australian industry official connected with the talks said regulations were necessary to ensure that Australian sugar refined in Thailand did not find its way back into the Thai domestic market.
The official told Reuters that the agreement would not lessen competition between the two groups on raw sugar export markets.
In a statement, Keith De Lacy, chairman of Queensland Sugar Ltd, said the agreement would mutually benefit both industries.
"Queensland will benefit through the development of another raw sugar market in Southeast Asia as well as through the opportunity to develop tolling (refining) activities in other third markets," he said.
Prakit Pradipasen, chairman of the Thai Sugar Millers Corporation Ltd, said the Thai industry would benefit through better utilisation of refining capacity and more job creation.
No particular quantities of sugar have been set as yet. The Australian industry official said there was nothing to stop additional Australian raw sugar being refined in Australia by local operators, but an agreement with Thailand would create an extra outlet.
In a separate statement, De Lacy said the global sugar industry would continue to pursue world trade reform despite recently increased market prices and faltering World Trade Organisation Doha Round negotiations.
"Not only have efficient sugar producers suffered, but consumers all around the world are paying too much for their sugar," he said. The formal talks between the Australian and Thai sugar industries started in May 2005.