Sugar Technology
On-line News

January 2010

Welcome to our news page!

We try to bring you the latest news and comment on this page 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 at the left.

The holiday lull seems to have started early but what there is, is worth reading :


In September we had to rescale the sugar price graph and now we have had to do it again as the price powered out of the 22 to 24 US¢/# range it had been in early in December.

World Price

It peaked at 27.5 ¢/# after Christmas and had dropped to about 27 ¢/# by the end of the month – although it doesn’t look as if it will stay there : there seems to be more energy in the market than that.


India is already talking the estimate for 2009/10 with comments along the lines of the total production being a ‘little less’ than 16 million tons [it was estimated to be close to 17 million a month ago] but ‘not less’ than the previous year’s 14.7 million.

One sign of the cane shortage is that the millers in northern Uttar Pradesh have already entered into a price war even though the crop has only just started. The state advised a price of Rs 165-170 a quintal [about US$35 per ton] for this current season but the millers agreed among themselves to offer Rs 25/q above that and then promptly started out-bidding each other. They seem to be currently paying Rs 200 to 205/q [about $44/t].

In yet another move among the turmoil which is India’s sugar industry, the government has extended by 15 months the deadline for re-exporting the sugar imported for refining up to April 2008 because the country cannot afford to export any sugar at the moment. The sugar imported after that date doesn’t have the same re-export obligation.

A storm is brewing on what the millers see as discrimination between local sugar and sugar imported for refining. Local sugar is subject to a special low price for 20% of production so that the government can give it to the poor and it also controls the distribution of the rest. Imported sugar doesn’t have such limitations. However, most or all refining operations are owned by millers so one might see a split within the millers’ organisation.

On another front, the government is accusing some millers of defaulting on their ethanol deliveries to fuel companies [which then cannot put into effect the mandatory 5% substitution] because they can make more money by selling crystal sugar. Shortly after that accusation, the Government announced an increase in the ethanol price from Rs21.5 to Rs27 per litre but that is still only 58 US¢/ℓ.


China seems to using its national sugar reserves wisely, releasing about 500 000 tons on to the local market last month – but only for food manufacturers to buy. It has purchased between 2 and 3 million tons in the last 12 months or so, again from local sources.


A federal report on Australia’s industry has found that the land area devoted to sugarcane in Queensland declined by nearly 5% in 2008/9. This led to a similar decline in sugarcane and hence the lowest production for nearly a decade.

Meanwhile, as the next step towards divestment, CSR has renamed its sugar division : from now on we are to know it as ‘Sucrogen’. The building products division will continue to be known as CSR [which started out life as ‘Colonial Sugar Refining’] even though Sucrogen will own the CSR trade name as far as sugar is concerned ...


Following the big freeze that we reported in November, some parts of the US beet industry are struggling as the beets start to rot in storage following the damage. It is not clear how significant this is.


Heavy rainfall has disrupted the end of the harvest in Louisiana and the consequent flooding is threatening next year’s crop.


The company insurance aspect of the explosion at Imperial’s Savannah refinery has been finalised with an agreed payment of $345 million. Presumably there are still payments to be made to the families of workers who died and to those workers hurt in the blast.


Cuba’s 2009/10 crop has started. The island is hoping to produce the same amount of sugar this year as last but hasn’t yet released the figures for last year! The best guess seems to be that it was about 1.3 million tons. This year though, there will be 10 less factories in production than last year.


Bunge, the trading house which bought T&L’s trading division 18 months or so ago, is fast developing its new sugar division : it has just purchased Brazil’s Usina Moema which has about 60% interest in six factories in total with a combined annual crush of over 15 million tons of cane.


Following last month’s news that California’s Amyris Biotechnologies wants to trial a sugarcane based aviation fuel, the company has announced that it is taking a 40% stake in the Boa Vista sugar company in Brazil so that it can establish a biodiesel plant there. This is not esterified vegetable oil though, Amyris is talking about diesel from transgenic yeasts.


Further to our item on Savola in the November News, the company has announced that it will no longer be participating in the Turkish Government’s privatisation of some of its sugar factories. It said that it didn’t have sufficient time to study the assets but, equally, didn’t rule out participating in future privatisations.


There seems to be a row brewing with the new Mumias power export project. Mumias is blaming KPLC, its customer, for causing “boiler tube leaks, incomplete combustion of bagasse [and] ultimate damage to the steam turbine” because that company is insisting on reducing demand in the middle of the night [something which it claims it can do under the PPA]. It looks as if the boilers are not up to the job, either through a specification or design issue although tube leaks don’t sound like a specification one...

The company has also announced that it is embarking on an ethanol project expected to produce 20 million litres a year of potable and industrial ethanol. There is no reason why that cannot be converted to a fuel ethanol plant at a future date of course.

At its recent AGM, the company’s MD [CEO] also told shareholders that it was looking at acquisitions both locally and regionally. It has always been seen as a potential buyer for its closest rival in capacity terms, Nzoia, which is currently due to be privatised in the next 12 months or so. Other countries that were specifically named were Tanzania and Uganda.


There seems to be a dispute brewing between Triangle and the much discussed proposed Zimbabwe Bio-Energy project on Nuanetsi Ranch. The new project cannot proceed without water and the Tokwe dam will not go ahead without international aid which is probably still years away. ZBE claims that it was given water rights to water from the Manyuchi Dam by the government ‘with Triangle’s blessing’. Triangle, on the other hand, claims that it has exclusive rights to the water from Manyuchi.


The Procana sugar and ethanol project at Massingir in Moçambique’s Gaza province has collapsed without any real development having taken place. It seems debatable whether the owners cancelled it or whether the government withdrew the licence but whichever is true, it is at an end.

Homepage  Return to Current News  Page Top