things about to get tougher for gns?

I have been running the numbers. Woochip price negotiations have been ongoing but nothing announced yet. The announcement is late. However pressure is all on the Australians due to rampant $A. I calculate that to bring $A prices into line with Chilean prices would require about a 10% cut to $A price level. About a 15% cut is required to bring into line with the international average. I suspect GNS and others will have to bite the bullet and agree price cuts. A 5% cut is a "win" for GNS and probably best they can expect. 10% is probably fair and 15% means they are really taking it on the chin. Will be interesting to see the outcome. Interesting Australian producers have not lost any market share in Japan despite the higher prices so perhaps between 5-10% cut is achievable. I believe the market expects some cut maybe 5% but anything more is another nail in the GNS profit and loss statement.

It really just highlights how weak Japan demand at a time of high $A is really the worst possible outcome for a company like Gunns. Question is can they survive this further hit to profits? I still suspect the restructuring is a more important issue but a price cut wont help. They will also have to dramatically reduce the cost base in Tasmania which means more closures and cuts...sorry about that but cant see a way around it.

Any views appreciated, apart from perhaps the usual GNS is dead response!!

Lord