Sugar Industry News : February 2016
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The world price has fallen back again, closing January at slightly under 13 ¢/lb. That is despite the consensus view that the position will be tight this year. It is probably the generally negative view in the world economy which is causing the problem but at least the oil price bounced off the $28/barrel it hit in January to close at $36.
MAYUGE SUGAR TO START ELECTRICAL EXPORT PROJECT
Mayuge Sugar is only 16 km from Uganda’s largest factory at Kakira but it claims to crush 1,7 million tons of cane a year and is planning for 10 000 tcd. It is reporting that it will start a US$ 63.6 million electrical export project within three months and that will give it 23 MW of capacity. The selling price is said to be US 9,5 ¢/kWh.
Meanwhile, at Kakira itself, the current distillery project is reported to be on track to be operating in July. The Madhvanis state that it will produce 20 million litres per annum.
SWAZI DROUGHT CONTINUES
The Swazi industry is predicting losses of US$ 60 million a year if the current drought doesn’t break soon. $40 million of that would be from Simunye alone. The companies have already cut back water consumption by 50%.
AL KALEEJ IMPORTS CLOSE TO 1 MILLION TONS
That is the advantage of having a million ton raws silo : Al Kaleej imported a record 943 000 tons in Q4 2015 according to Platts Kingsman. All the sugar is said to come from Brazil.
PAKISTAN BOILER EXPLODES
A boiler at Kashmir Sugar [which, despite its name, is near Multan in central Pakistan] exploded last month, killing 8 workers. The cause of the explosion is unclear with conflicting reports as to the origin but it seems that the unit was under maintenance at the time.
PAKISTAN EXPORT SUBSIDIES FORCE UP DOMESTIC PRICE
The Pakistani government’s export subsidy on which we reported last month has, predictably, resulted in a local price rise of more than 8%. The result was that the government warned that it would ban exports again if the domestic price rose by more than 10% [which probably means that the price will have risen by 9,9% by the time you read this].
INDIAN CROP EXPECTED TO BE LOWER
Indian millers are now predicting a 26 million ton crop following the second year of sub-normal monsoon. Last July they were predicting 28 million tons but that fell to 27 million in September. It has also been reported that the federal minister of food has stated that India will be able to meet local demand. It is not clear whether he was forecasting a balanced crop [which would be about 24 million tons] or whether he was just telling people not to panic.
INDIA TIGHTENS ENVIRONMENTAL REQUIREMENTS FOR WATER DISCHARGE
The Federal government is introducing stringent requirements for water discharge from the sugar industry including a flow limit of 200 litres per ton cane crushed [100 of waste water plus 100 of spray pond / cooling tower blowdown]. The values depend on whether the water will be for irrigation or discharge to a water course but some sample figures include TSS and BOD both either 100 or 30 mg/ℓ and TDS of 2100 mg/ℓ.
EL NIÑO IMPACTS ON PHILIPPINES
The Philippines’ Sugar Regulatory Administration is flagging that the drought it is facing with the current strong El Niño will reduce the country to almost balance : 2.25 to 2.35 million tons of production and 2.2 million tons of domestic demand.
PUUNENE TO CLOSE
As we predicted last month, Alexander & Baldwin is closing the Puunene factory on Maui, bringing to an end the commercial production of sugar in Hawaii. That also means that the electrical export station at the factory will be closing.
BARBADOS INDUSTRY CONTINUES TO WILT
The company set up to create the new ‘multi-purpose’ factory at Andrews is threatening to pull out if the government doesn’t produce the equity it promised. On the other hand, can you blame it when production continues to fall, the drought continues, 2017 looms large and the world price is still in the doldrums. The latest published ISO data is for 2013 with a 20 000 ton estimate but there are reports that the current crop [assuming it has started] will be less than 100 000 tons of cane.
GUYSUCO CLOSES WALES FACTORY
Guysuco announced last month that it was to close the Wales factory on the west bank of the Demerara just south of Georgetown. As it was predicted to lose US$ 8 to 9 million this year alone it is not a surprising decision. The company has said that the cane will be crushed at Uitvlugt. Next month we expect to report a strike by Guysuco against the decision.