Sugar Industry News : August 2021


 

Welcome to our news page where we try to bring you the latest news and comment but it will always be a better place if you send us your news. You can write to us by clicking on the Contact link above.

WORLD PRICE

Despite a significant amount of intra-month volatility, Raw sugar prices ended July almost unchanged at just under 18 ¢/lb. Prices had initially reached four month highs of 18.35 ¢/lb in early month trading thanks to uncertainty over potential frost damage to the cane crop in top producer Brazil, before Macro concerns linked to OPEC+ production levels and a global COVID slowdown pushed prices lower. In the second half of the month, short covering amid fresh frost concerns in Brazil brought prices back to where the month had started. Nearby physical demand remains weak amid uncertainty over the Delta COVID variant and all-time high freight rates. The Oct/Oct White Premium came under significant pressure during the month ending 30% lower at $51.50 per ton. The Brazilian Real weakened slightly against the US Dollar which continued its strong run of late :

World Price

White Premium

TONGAAT HULETT REPORTS LOSS AGAIN IN 2020/21

Leading South Africa sugar group Tongaat Hulett reported higher losses in their annual financial statements, this despite making progress in their now well publicised debt restructuring goals. Headline earnings per share, the main profit measure in South Africa, declined by a massive 801% to a loss of 631 cents, from 90 cents headline profit per share in 2020, with revenue slumping 3% to 1.03 billion USD, leading to a 44% decrease in operating profit. The firm said it would not be declaring a dividend to its long-suffering investors. In other company news, the firm finalized the sale of its starch business to KLL Group for 370 million USD.

AL KHALEEJ SIGNS DECLARATION OF INTENT TO BUILD NEW BEET FACTORY IN SPAIN

Dubai’s Al Khaleej Sugar Co., owner of the world’s largest port-based sugar refinery, received the green light to build a new Beet Sugar Factory in Spain on July 16, extending its reach beyond the Middle East and North Africa. The company plans to start construction of the plant in Merida next year according to Managing Director Jamal Al Ghurair. The new factory will require an investment of about 500 million euros (USD 590 million) and will produce as much as 900,000 metric tons of refined beet sugar a year. This is on par for size with Al Khaleej's Al Canal Beet factory project in Egypt which began production trials in April of this year. Operations in Spain are expected to begin in 2024.

BRITISH SUGAR LAUNCHES LEGAL CHALLENGE AGAINST TARIFF-FREE IMPORTS

British Sugar has launched a legal bid in the UK High Court to challange a decision made by the UK Government last December to unilaterally allow 260,000 tonnes of “raw cane sugar” to enter the UK tariff-free for 12 months from January 1 as part of the UK’s post-Brexit global tariff schedule. British Sugar, which refines sugar from domestic sugar beet, has argued that the decision amounted to a state subsidy for its rival, Tate & Lyle Sugars, a wholly owned subsidiary of US American Sugar Refining. British Sugar's legal team further argued that the effective “subsidy” would also unfairly undercut EU sugar producers who export 500,000 tonnes of sugar to the UK per year. Perhaps the key arguement to be tested by the court will be whether or not the tariffs are in breach of both the Northern Ireland protocol and the EU-UK Trade and Cooperation Agreement (TCA). This is the first High Court test for the UK's post-Brexit trade policy.

EU SUGAR OUTPUT SEEN HIGHER IN 2021/22, STOCKS TO CLIMB

Refined sugar production in the European Union is forecast to rise in the 2021/22 season leading to an increase in stocks, the European Commission said in a short-term outlook report. The EU's executive projected refined beet sugar production would rise to 15.5 million tonnes in 2021/22, up from the prior season's 14.5 million. Sugar beet yields were forecast at a healthy 74 tonnes per hectare. This is 10% higher than the previous season but in line with the five-year average. Consumption has been forecast to stabilize at 14.8 million tonnes after falling slightly in 2020/21 thanks long term demand erosion and a slowdown in the catering sector due to the COVID pandemic. Stocks at the end of the 2021/22 season are forecast at 1.4 million tonnes, up by almost a third from 1.1 million in 2020/21.

INDIA SUGAR STOCKS SET TO FALL TO FOUR YEAR LOW ON RECORD EXPORTS

India's sugar inventories have been depleted by almost 20% and the country could start the 2021/22 marketing year with its lowest stocks in four years after mills exported a record amount in the current year according to the Indian Sugar Mills Association, a leading trade body. The south Asian country is set to export a record 7 million tonnes of sugar in the current season which could see it start the 2021/22 marketing year on October 1st with a carry forward stock of 8.7 million tonnes, down from 10.7 million tonnes a year ago. Production is expected to remain flat at 31 million tonnes of sugar in 2021/22 compared with 30.9 million tonnes in the current season. In December of 2020, India approved a subsidy to encourage cash-strapped mills to export 6 million tonnes of sugar in the 2020/21 marketing year ending on Sept. 30 although some mills also exported sugar without this subsidy as they needed funds to make cane payments to farmers according to industry officials.

SUEDZUCKER REITERATES POSITIVE ANNUAL OUTLOOK DESPITE QUARTERLY SLUMP

Suedzucker AG confirmed a drop in first-quarter earnings as Europe's largest sugar producer faced ongoing economic fallout from the coronavirus pandemic, though it still expects profits to climb in its full financial year. Suedzucker said group operating profit dropped 20.1% year-on-year to 49 million euros (USD 58 million) in the first quarter ending May 31st. Despite this, it continues to forecast a full-year group operating profit of 300 million to 400 million euros, up from 236 million euros last year. Its full-year operating profit for its Sugar division is also forecast at between breakeven and 100 million euros. The company's first-quarter numbers were dented by operating losses of 25 million euros in its sugar divison.

loading