Sugar Technology
On-line News

February 2003

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Following the change of Government, Kenya featured strongly on the wires last month.


The elections were only had in the last days of December but the new government is already wielding its power over the sugar industry:

  • The new Vice President has announced that the long awaited Busia project was to go ahead using the old B tandem from Mumias. Contrary to recent suggestions though, the current scheme is to have a conventional factory rather than the previously proposed syrup thick factory reliant on Mumias for final processing.
  • FC Schaffer [from Louisiana] have been advised that its contract to run Nzoia, which nominally expired in March 2002, will not be renewed. The troubled factory is crippled with KSh 12 billion [US$ 160 million] of debt and continues to owe its farmers large sums of money, making it difficult to manage in any event. A new contract to manage the company will apparently be put out to competitive tender.

Other stories in the news this month included the local Miwani farmers putting the new government under pressure to re-open the factory there, particularly as Chemelil [which is processing the Miwani cane] says that it cannot afford to pay growers the going rate for cane. The cane payment story continued too at Mumias where the company has said that it will reduce payments to unregistered farmers by 15%.


The EU has had exploratory meetings with Brazil to discuss that country's current complaint about the EU's sugar policy. However the EU did not go meekly : there was talk of counter claims on a broad front, including Brazil's approach to patent laws on items such as pharmaceuticals.

On another front, a report commissioned from LMC by the American Sugar Alliance has just been published. It shows that Australia, Brazil, South Africa and Thailand all support their local sugar industries by indirect practices. These are the countries which claim that their industries are unsupported. Who will use this information and where is something to be watched.


The world price is starting to climb again [it was moving towards 9 US per lb at the end of January] but can it be sustained at that level? Perhaps some kind reader out there would like to comment on any impact that the potential conflict in Iraq might be having.


The report commissioned by the Queensland Cane Growers has been published and [like other reports before it] warns of the need major changes if the industry is to survive : changes to the basic structure, targeted deregulation and co-operation within the industry.


The growers in the area of Hampden factory, the factory closed last month by the government, have reacted badly to the plans for processing their cane at Long Pond. They have even formally proposed that they buy the asset and run it themselves but one suspects that they really just want to see adequate compensation for the additional transport costs.


It seems that China is definitely 'managing' its sugar market. In an article seen on the wire in January the domestic production was forecast at about 9.5 million tons and lo, the domestic consumption was predicted to rise from last year's 8.8 million to 9.5 million.


The German sugar company Nordzucker has purchased three beet factories from what was Beghin Say. It already owns factories in the Czech Republic and Slovakia so now has the makings of a good business in the east.


The USA has been selling the sugar stocks it was forced to buy from producers two years ago to smooth out short term shortages caused by this year's relatively poor beet and cane harvests.


Nigeria has established a ministerial committee to oversee the development of its sugar industry. Also on the committee are representatives of the users, the producers and the importers. There is much to do.


Iceland, the UK supermarket group which recently bought Booker plc, is suing the Guyanese government for 6.7 million [US$ ~11 million] of unpaid compensation plus some 5 million of interest. The debt arose when Guyana nationalised the sugar industry in 1976 and although some was paid, nothing has been paid since 1989. It probably wasn't worth pursuing while Booker still owned Booker Tate [which manages the industry] but all that has changed with the selling off of assets and the ultimate demise of the group.

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