Sugar Industry News : January 2019
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WORLD PRICE
The world price continued down in December to end the year at about 12.25 US¢/lb :
Confusion seems to be the key word at the moment among the pundits with all sorts of possible outcomes but no consensus. Watch this space!
TURKEY PULLS THE SALE OF THREE FACTORIES
Perhaps the planned privatisation of 14 beet factories in Turkey is not going as well as originally thought. Following the successful sale of the first four factories in May 2018 we have heard no more until the government announced at the end of December that it was cancelling the sale of the Burdur, Yozgat, and Ilgın factories.
FIELD SABOTAGE IN NORTHERN UGANDA
It is reported that 600 acres [~240 ha] of seed cane have been destroyed by fire at the new Atiak project in the far north of Uganda. This is the second of the Ugandan projects that we reported last month. Although some people wonder whether the arson is related to unrest in South Sudan it is more likely to be related to local tensions.
NEW ESTATE PROPOSED FOR NORTH EAST ZAMBIA
Kafue sugar is a relatively small scale operation to the north of the river, just 20km from ZSC's Nakambala factory to the south of the river as the crow flies [but about 100 km by road]. Its owners are making the first moves in an effort which might see a new factory established in Muchinga Province which is at the top end of the Luangwa valley and bordering Malawi and Tanzania [the TAZARA railway passes through Muchinga].
XINAVANE REFINERY IS OPERATIONAL
Last month the President of Moçambique inaugurated the new refinery at Tongaat Hulett's Xinavane factory so it is safe to say that the refinery is fully commissioned and operating satisfactorily [on the basis that one wouldn't go ahead with inauguration if it were not]. The refinery has a capacity of 90 000 t/a of refined sugar.
NEW MALAY GOVERNMENT MOVES AGAINST SUGAR COMPANIES
Just seven months after taking power, the new government of Malaysia has announced that it has started issuing sugar import permits to food and beverage manufacturers 'as part of the government's efforts to break monopolies in several sectors'. The first permits seem to be for companies on the Borneo parts of the country.
INDIA DOWN TO 28 MILLION TONS IN 2019/20?
A water shortage in Maharashtra and Karnataka – due to a disappointing 2018 monsoon in those states – and a 'white grub' infection are seen as causing a further reduction in Indian production in the 2019/20 year with a preliminary forecast of 28 to 29 million tons of crystal sugar.
INDIAN ETHANOL SCHEME OVERWHELMED WITH APPLICATIONS
As we reported last July, the federal government of India started to incentivise ethanol production. That included the equivalent of some US$ 800 million of soft loans. In practice, there were 282 applications asking for a total of some $ 1.9 billion. The government is reported to be poised to ask cabinet approval for another tranche of cash in excess of $ 1 billion in order to provide loans to all applicants.
MAHARASHTRA FACTORY TO TRY BEET
A brave [foolish?] factory in Maharashtra, Baramati Agro, has announced that it will try and process beets from an experimental 150 acres [~60 ha] field trial of beets. Clearly it cannot have been able to justify the purchase of a beet front-end so few beets but it doesn't tell us what it plans to do. Others have tried putting beets into a tandem while crushing but have not succeeded.
INDIA REQUESTS CHINA FOR EARLY QUOTA RELEASE
Last month India asked China for an early release of the raw sugar quota promised to it so that factories can produce raws before switching to sulphitation white as the reverse switch is more difficult. There was no sign of an early release at the turn of the year and of course it is not certain that India will get the 2 million quota that it hopes for. If it does get it, will the factories be prepared to sell at a price that the Chinese are prepared to pay?
FIJI REPORTS A POOR YEAR
Without giving any hard facts at this stage, Fiji seems to be preparing to release poor figures. It has noted that the country was hit by two tropical storms and that Lautoka mill got off to a poor start with a lot of breakdowns despite [or perhaps because of?] a just-finished $16 million refurbishment.
CUBA FORCE-STARTS THE CROP
The start of the Cuban crop is usually a slow affair with some factories starting in November but the last start only being in mid- to late-January. That is presumably to match the micro-climatic conditions across the island in order to optimise production.
This year the government instructed that all factories were to be operational by the end of December, an attempt to improve production after the disaster that was last crop which was over 40% down on budget. It sounds like economists, not agronomists, are making the decisions.
BRAZIL FIRMS-UP WTO COMPLAINT AGAINST INDIA
The Brazilian Ministry of Trade has stated that it is starting a formal action at the WTO against the Indian government's subsidies to that country's sugar industry. The move follows informal communications between the two countries.
BRAZILIAN INDUSTRY PUSHING FOR MORE ETHANOL CAPACITY
It seems that the Brazilian industry is installing more ethanol capacity. One example quoted is that of Louis Dreyfus' Biosev which is reported to be installing additional columns at two of its factories in the Mato Grosso do Sul state so that the ethanol capacity for those factories is increased from 50% of total fermentable sugars to 90%.