Sugar Industry News : February 2017


 

Welcome to our news page where we try to bring you the latest news and comment but it will always be a better place if you send us your news. You can write to us by clicking on the Contact link above.

WORLD PRICE

The world price seems to be stable - for now :

World Price

Has the real started to track the price again, albeit with a large offset relative to 2014/15?

SUIKER UNIE SEES MAJOR EXPANSION

Suiker Unie, the Dutch cooperative, is expecting sugar beet production in Holland to increase by between 20 and 25% after the EU regime in October. Holland is set in Europe's highest production band – Suiker Unie quotes 14 tons of crystal per hectare – but the cooperative thinks that it is better suited to export that others and hence the surge in production.

TOKWE-MUKOSI DAM FINALLY COMPLETED

Three years ago Zimbabwe's Tokwe-Mukosi nearly collapsed spectacularly during construction but it is finally reported to be complete after some financial manoeuvres involving Tongaat Hulett paying the Italian contractor offshore. It has come too late to alleviate the impact of the current drought but should take the pressure off Lake Mutirikwe [Kyle as was] in the future.

The dam is reported to have cost $300 million with a capacity of 1.8 billion cubic metres. That is said to be enough water to irrigate 25 000 ha of land.

SHREE RENUKA AND ISMA DOWNGRADE NATIONAL FORECAST

Shree Renuka, controlled by Wilmar since 2014, has stated that it estimates that the 2016/17 Indian crop will only produce about 20 million tons of sugar, some 10% lower than the view of the government. The Indian Sugar Mills Association is not so pessimistic but it did downgrade its estimate last month to 21.3 million tons so about one million below the official estimate.

Maharashtra seems to be a major part of the problem. In the 2015/16 crop it produced about 8.4 million tons of sugar but this crop is not expected to produce more than 4.5 million.

THAILAND TO REMOVE PRICE CONTROLS?

The Thai government currently sets the retail price of sugar in the country : today's price is THB 24.5 per kg which, at the current exchange rate, is about US 31.8 ¢/lb. However, the government is suggesting that it will remove all controls. This year's crop is expected to be about 3% lower than the 2015/16 one due to weather related events.

VIETNAM CONFIRMS POOR CROP

The Vietnam Sugarcane and Sugar Association [VSSA] has reported that the 2015/16 crop produced only 1.23 million tons, well down on the previous crop of about 1.4 million tons. It has not issued an estimate for the 2016/17 crop.

WILMAR AND CANEGROWERS STILL AT LOGGERHEADS

It appears that no progress has been made with respect to the 2017 cane purchase contracts between Wilmar and the growers – to the extent that the growers are talking of 'going on strike'. One has to ask, given that broadly two thirds of the cost of sugar production is in getting the cane to the factory gate, whether it makes sense to grow the cane and then let it rot.

MACKAY SUGAR'S POOR PERFORMANCE

Last year was not good for Mackay Sugar – the last Australian-owned sugar company – as it left 350 to 400 000 tons of cane uncrushed despite the longest crop in decades. To be fair, some of the problem was weather related but it was also the result of poor factory performance. Having said that, Tully also left about 500 000 tons of standing cane and that was without factory problems.

TPP TO COLLAPSE?

Its seems only a month or so back that we wrote about the hopes and disappointments of the Australian industry as the Trans Pacific Partnership negotiations came to a close. It now seems that nay hopes were short-lived with a new government in the USA openly saying that it will not ratify the TPP.

GRAHAM CLARK TAKES ON FSC CHALLENGE

Following the debacle in Nigeria with the Dangote non-projects, Graham Clark has been appointed to run Fiji Sugar Corporation as one of several moves announced late in January. His appointment follows the departure of Abdul Khan and should see a substantial improvement in the company : he has already placed some projects on hold. At the same time FSC also announced that Czarnikow was being appointed to sell its sugar.

MAJOR CHANGES COMING TO GUYSUCO

Back in the 1960's and early 1970's Guysuco would regularly produce in excess of 300 000 t/a. Then it nationalised …. After it dropped to below 150 000 t/a the government called Booker Tate back in [it was Booker Guyana that was nationalised] and production went up again until it fired that company. It is now back to 183 000 t/a and this is the largest employer in the country and a major forex earner.

Last month the government advised unions and the opposition party that it plans to sell Skeldon 2, close Rose Hall and possibly sell Enmore so that it would be left with three estates : Wales-Uitvlugt, Albion-Rose Hall and Blairmont. It implied that it might have a US buyer for Skeldon 2 but who would want any of this industry?

A PATENT FOR LOW-GI SUGAR?

A Malaysian/Australian company called Holista Colltech stated last month that it was going to apply for a patent for its low-GI index 'sugar'. The company is expecting to launch the product in the market by mid-2017. It claims that when consumed it 'reduces the rate that glucose is digested throughout the body'.