Sugar Industry News : January 2015


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The world price continued to slump in December and ended the calendar year at about 14.2 ¢/lb, not far off the low of 13.5 ¢/lb that it hit so spectacularly in mid-September.


The government of Kenya seems to understand that there can be no more delays of the Comesa implementation of the sugar regime : from Q2 2015 all of the members of Comesa [which ranges from Egypt in the north to Zimbabwe in the south] will be free to sell sugar into Kenya. The manufacturing cost in Kenya is reported to be 26 US¢/lb. The government is telling the sugar companies that they must reduce costs and diversify but as the biggest cost is the cost of cane and the cane is grown by voters, perhaps it hasn’t thought through that advice.


One of the reasons that Kenya keeps putting forward for further delays of the Comesa sugar regime is to give it a chance to privatise the remaining parts of the industry [something that it has been saying since at least 2008]. In December the privatisation measures failed to make it through parliament [or, more likely, were not even put before parliament – it is difficult to tell] so there is no chance of the five mills being privatised in the next three months.


All records were broken towards the end of the year when Bunge loaded a single cargo of nearly 106 000 tons of raws and delivered it to Al Khaleej in Jebel Ali port :

UBC Ottawa

The vessel, the 118 000 ton UBC Ottawa, was loaded in Santos in the middle of November and was discharged in mid-December. Al Khaleej has a peak discharge capacity of about 3 000 t/h [yes, per hour] so she would have departed within three days of arrival if there were no rain events.


Big fish from little fish grow : the sugar factory in Baghlan has reported that it has nearly 5000 tons of beet to process from the 2014 campaign but is struggling with competing crops. The factory ran until 1991 but then closed for 15 years, being reopened eight years ago for the 2006 campaign. Unfortunately it was then destroyed a year later in a major bombing incident. Let’s hope that this time it can keep going.


The Pakistani government has given approval for the export of 500 000 tons of sugar but without any export subsidies. It will be interesting to see whether the sugar companies see the current world price attractive enough to actually sell any sugar outside of the country.


Everyone is predicting that the federal government in India will introduce an export incentive of up to INR 4000 per ton within the next two months – despite its assurances to the WTO that it would not do so.


China’s Bright Food group tried to purchase CSR / Sucrogen in 2010 in a three-way fight with Wilmar and Bunge. As we know, Wilmar won and it seems that Bright Foods has been looking ever since for another sugar industry player to buy. Last month it bought Guangxi Fengshan, a company with 10 sugarcane factories in Guangxi province. It is reported to produce 600 000 tons of sugar from about 200 000 ha of land, not an impressive performance.


It seems that the federal government is going to meddle in the affairs of Queensland but that is being welcomed but some Queensland people : it will set up a taskforce to investigate the implications of most factory owners to sell the sugar they produce on a direct basis and not through Queensland Sugar Limited. There are no terms of reference yet but QSL is pushing hard the case for the cane growers having a say in how the sugar is sold. It would though, wouldn’t it?


Mitr Phol, now the owners of Maryborough Sugar Factory (MSF), has four mills in Queensland. It has announced that it will invest another Aus$50 million during the current off-crop, mainly in South Johnstone. It wants more capacity and better extraction efficiency at that factory.