February 2004 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 E-mail link at the left. Last month the sugar price stayed in the doldrums below 6 ¢/lb and at least one trader predicted that it would fall lower as Brazil produced even more sugar! However it was the various US Free Trade negotiations which dominated the wires. US / AUSTRALIA FREE TRADE Talks on a Free Trade Agreement between the US and Australia have been going on for over a year and should have finished by now. It would appear that sugar is a major stumbling block so there was talk of excluding sugar from the Agreement last month. This turned out to be totally unacceptable to Australia [it would, after all, be political suicide for them]. On the other hand, particularly with CAFTA including sugar it might be political suicide for the Bush regime to include sugar in the Agreement when 2004 is an election year. CAFTA Following last month’s report, the US confirmed on January 25 that Costa Rica has been added to the Central American Free Trade Agreement. The next day it issued a specific statement on sugar and CAFTA, pointing out that the increased imports from CAFTA equate to about 1.2% of domestic sugar production in the first year of operation and will only climb to about 1.7% in 15 years. The statement also showed that sugar would be almost insignificant in the overall context, being less than one quarter percent of all CAFTA trade. BROOKLYN CLOSED Domino’s Brooklyn refinery has processed its last raws, closing on Friday January 30 after 148 years of operation. The closure was inevitable after Domino was bought by the Florida joint venture which already owned the RSI refinery in Yonkers but the real cause was probably the bitter 18 month strike in 1999 to 2001. MOROCCO Cosumar has announced plans to expand capacity at its Doukkala beet factory from 12 000 to 15 000 TSD. The project budget is $90 million. Cosumar is a state owned enterprise which operates several beet factories and two refineries. From memory, most if not all of the beet sugar is produced as raw sugar. BELIZE DAM GETS OK Following on from our December news item, the Privy Council has turned down the objections to the Chalillo hydroelectric project, clearing the way for the project to proceed. It is unclear what the implications are for the proposed Tower Hill export co-generation scheme. IRAN Iranian sugar production is now running at 1.2 to 1.3 million tons and is forecast to increase to 1.4 million in the next year. However, current consumption is estimated at about 1.8 million tons so the country will continue to import for the foreseeable future. CUBAN PERFORMANCE UP TO EXPECTATIONS Cuba is reporting a much better start to crop than last year although performance is not exactly good. The government has said that 56 mills of the remaining 86 mills had started crushing by mid-January compared to only 30 at the same time last year. However, it also reporting that capacity, although up from last year’s dismal 62%, is only 72%. Last year’s production was only about 2.2 million tons compared to 3.6 million in the year before. This year’s budget is 2.6 million with 700 000 tons reserved for domestic consumption and the rest due to be exported. The government appears optimistic that it will reach budget by the time that crop finishes in May but it is threatening any mill that exceeds a production cost of 4.5 ¢/lb with closure. KENYA Is the Busia project dead [again] or in the process of being revitalised? The KSB has stated that Booker Tate were showing no signs of developing the factory so it was reviewing the project with a view to cancelling BT’s agreement. But not all of the announcement was negative as the possibility of handing the project over to Mumias was floated. In another move that points to that possibility the government has announced an export co-generation programme that specifically mentions the sugar industry and Mumias in particular. Regular readers will remember that the latest thinking was that Busia would be a syrup factory exporting electricity and Mumias would be the processor of the syrup. SKELDON II The wires carried an interesting story last month about a World Bank team visiting Guyana to review several WB projects including Skeldon II. The project was described by the government as its “centre piece of the restructuring of the sugar industry” but we had heard on the grapevine that the project was stalled and unlikely to go ahead. In an unrelated article, India was again reported to be pressing the Guyanese government to use its sugar expertise to help develop the industry. EU The latest EU move is to give access to surplus sugar to producers of yeast. It seems this has been done in the face of opposition from within the EU and in defiance of global trade rules which require such sugar to be exported. As a spokesman for one of the EU member states was reported to say : “wait and see what the World Trade Organisation has to say”. CHINA : THE ONLY HOPE? ISO is suggesting that China might be the only hope for an underpinning of the sugar price. It estimates that this year’s production might be somewhere between 9.5 and 9.9 million tons, well down from last year’s 11 million. As consumption is about 11 million tons, imports of 1 to 1.2 million are expected, encouraged by a 25% reduction in tariff as part of the country’s agreement with WTO. The reduction in production seems to be related to weather [drought and frost] and a reduction in beet planting. TRINIDAD The thinking of the T+T government is starting to become clear as it starts the new crop, at least at Ste Madeleine. A new company, ‘Sugar Cane Manufacturers Ltd’ has emerged from the ashes of Caroni [itself having arisen from the ashes of the private sector following nationalisation in 1975] and farmers, with appropriate financial support, are now responsible for delivering cane to the factory. Meanwhile, in order to meet domestic demand, an agreement has been made to import Guysuco sugar for refining at the Ste Mad refinery. BEET FARMERS GET NEW LEAF SPOT DETECTION METHOD A high-technology detection kit for the early detection of Cercospora leaf spot disease in sugar beets has been introduced. The kit uses technology from forensic science - real-time polymerase chain reaction. SUGAR BASED ADHESIVES The US Agricultural Research Service has developed a range of edible adhesives based on cross-linked sugars [including sucrose] and organic acids. Although the work was in response to a particular request, the family of adhesives are thought to have a broad range of applications and can be tailored to suit by selecting the appropriate sugar and acid. 
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