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EXPLOSION AT SAVANNAH REFINERY
News is filtering in of a major explosion at Imperial’s Savannah refinery at about 19:00 EST Thursday February 7. The reports indicate that up to 100 people have been injured but there are a lot of contradictory statements. The explosion was in the general location of the packing station. We will update this item as information becomes available
Over the weekend of February 9/10 it was reported that the bodies of five people had been recovered and that three people still remained unaccounted for. A total of 20 people are still hospitalised, most of them understood to be in a severe condition. The CEO of Imperial, the holding company of the refinery, is reported to have said that “sugar dust in a silo used to store refined sugar before packaging likely ignited like gunpowder”. In truth, we may never know.
The world price kicked up in early December and has continued to climb since, ending January above 12 ¢/lb. Part of the reason is that the ethanol price equivalent has been above that and Brazilian factories have shifted in favour of ethanol production. The other reason seems to be the forecast for India. It has been reported that the current year will drop back from last year’s record to 26 million tons but we have seen other estimates that it will shrink as far as 20 to 23 million tons.
EUROPEAN CLIMATE CHANGE INITIATIVE
The EU announced a major climate change initiative on January 23 – and set the scene for banning some biofuels from being used to achieve targets. You can read the details on the EU web domain but the key for ethanol [and oil palm] is the wording about the need for sustainability. There are concerns that this will be used to block the import of biofules when it suits Brussels to do so.
Coincidently [or maybe not?], the Royal Society [London] issued a report a week before the EU announcement which apparently cleared Brazilian ethanol as indeed sustainable. We shall see.
In a move similar to that of Irish Sugar, Eastern Sugar [the T&L and St Louis joint venture now being wound up] is suing the Czech government for incorrectly allocating the EU compensation package following Eastern’s decision to stop making sugar. The company is apparently claiming a further € 35 million from the government.
SUIKER UNIE CLOSES GRONINGEN
As expected, Suiker Unie has announced the closure of its factory in Groningen, northern Holland, rather than keep it open as an ethanol factory. That reduces the company to just two factories at Dinteloord and Hoogkerk but it is still expecting to produce the same amount of sugar – about 800 000 t/a – from the two.
Despite the fact that the expected flood of Mexican sugar into the USA didn’t happen, the American Sugar Alliance is trying to reintroduce sugar quotas in direct contradiction with the spirit and legal structure of NAFTA. As we reported last month, both sides are worried but there is probably nothing to worry about.
President Chavez is trying to use his oil wealth to control the Caribbean basin : he is offering to swap oil for agricultural produce with Caribbean and Latin American countries. Jamaica has immediately offered, inter alia, over 200 000 tons of sugar but as it struggles to produce 100 000 t/a and has a domestic demand of about 200 000 t/a it seems a strange proposal.
A Brazilian plastics manufacturer is proposing to invest $135 million in a renewable ethanol to ethylene plant to produce feedstock for its PVC production. There is nothing new about the technology but it is interesting to see the large scale adoption of sugarcane derived ethanol as a chemical feedstock in competition with the gasoline substitution market.
The governments of Ethiopia and India have jointly announced a $640 million line of credit for the expansion of the latter’s sugar industry. The money – 50% of the total needed – is reported to be the largest line of credit ever given by India.
Most of the money will go to the Tendaho project down towards the Djibouti border and hence well positioned for export. We first told you about Tendaho in February 2007. The rest of the money will go to a major expansion at Finchaa, supposedly to take the annual production from 80 to 270 000 tons.
Adverse weather conditions in the region have reduced the 2007 crop figures in Southern Africa resulting in reduced earnings for the Illovo group.
MOÇAMBIQUE FLOODS AGAIN
The Zambezi is threatening Marromeu again and the Buzi is threatening Mafambisse : both rivers are two or three metres above the flood alert levels. The water started to rise in the first week of the year and as January closed out the Zambian government warned Moçambique that it would have to open the flood gates at Kariba which will result in another surge going down the Zambezi : hopefully after the current surge has subsided.
Is the agrarian reform which has long held back the development of a more viable sugar industry about to be changed? The socialist programme was intended to help the poor people in the country by limiting land ownership to a maximum of, from memory, 5 ha. That forced efficient estates to be broken up and placed in the hands of smallholders. Yields plunged and it is not uncommon to find cut to crush times of seven days or more. In addition, the cane is essentially toll processed so there is no incentive for the mill owner to improve his performance [he pays for the capital cost, the smallholder takes the benefit].
Now the United Sugarcane Planters Federation [UNIFED], one of the largest sugarcane farmers’ groups in the country is telling the government that change is needed. Let us hope that it happens.
CELLULOSIC ETHANOL CLOSER?
General Motors has invested [an undisclosed amount] in a cellulosic ethanol research company : surely a sign that the company is getting close to cracking the economics of the process? The new US energy bill signed into law by the President in December mandates 36 billion gallons per year of renewable automobile fuel by 2022 of which 16 billion gallons is supposed to be from cellulosic ethanol so the prize is enormous.
The company is claiming that it will have its first plant – rated at 100 million gallons per year – will be in production by 2011. GM have said that the process itself ‘relies on gasification and patented microorganisms to produce cellulosic ethanol for less than US$1 a gallon.
DANISCO has licensed a Japanese company to use its technology for making anhydrofructose from starch. Anhydrofructose is said to be a calorie free sweetener which occurs naturally in certain mushrooms and seaweeds. If it those mushrooms then maybe you just imagine it is sweet?