Sugar Industry News : March 2017
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WORLD PRICE
The world price remained close to the level it has been at for a few months :
Things will be fine until some speculator upsets the applecart.
BRITISH SUGAR TALKS OF 50% INCREASE AFTER REGIME CHANGE
Last month we reported that Holland's Suiker Unie is expecting a 20 to 25% increase in Dutch sugar beet production after the EU regime in October. Last month British Sugar, the sole beet sugar producer in the UK, was reported to be suggesting that UK beet production could increase by 50% once the regime ends. That still leaves the unknown of Brexit of course.
AL NOURAN FACTORY ALMOST COMPLETE
Egypt's Al Nouran Sugar has announced that it will start commissioning its factory in April this year. The factory is located in the far east of the Nile Delta not far from Port Said, the northern entrance to the Suez canal. Al Nouran says that the factory will process beets through to 280 000 tons of sugar during the campaign and will refine another 350 000 tons of raws for the rest of the year.
ETIHAD SUGAR REPORTED TO BE DOING WELL
Last month was the Dubai Sugar Conference and a traditional time for proud announcements. Iraq's Etihad Sugar, the newest refinery in the region, told reporters that it had produced over 1 million tons in 2016 so it seems that the Iraqi market is now satisfied. Nonetheless the company is talking about doubling capacity starting in 2018.
INDIAN SUGAR PRICE AT RECORD HIGHS
It is reported that the internal price of sugar in India is at a record high as the shortage continues to bite. In practice it is unlikely that the country will need to import this year but in Q4 2017 it will enter the start of what is expected to be a very poor crop with much depleted reserves. So far the federal government has refused to reduce the tariff on sugar imports.
INDONESIA TO IMPOSE PRICE CONTROLS
Yet more government interference : the Indonesian government has announced that it will introduce a maximum price for sugar equivalent to 93 ¢/kg [42 ¢/lb] this month. The government has also issued licences to import 400 000 tons of raws which will probably bring the price down in any case. We are starting to enter the period when manufacturers need extra sugar in the build up to Ramadan [which starts in late May this year].
INDONESIA-AUSTRALIA FTA AGREEMENT
It seems that Australia's industry has had its wish granted : it is reported that the Free Trade Area discussions between Indonesia and Australia have led to a tariff reduction for Australian sugar from 8 to 5%, matching the tariff paid for Thai sugar entering Indonesia.
THAILAND TO CUT SUGAR SUBSIDIES
It is now a year or so since Brazil complained to the WTO about Thailand's sugar subsidies [there is saying in English about pots and kettles]. Last month the Thai government announced that it was going to end the scheme whereby the price is set by the Ministry of Agriculture by the end of 2017.
WILMAR CONTRACT NEGOTIATIONS BECOME MORE POLITICAL
As regular readers will know, the Queensland cane growers close to Wilmar factories are resisting the Wilmar contract. It seems that the Queensland government is refusing to use the law to force a resolution so the Federal government, in the form of the Deputy Prime Minister, is threatening to do so. The Australian Sugar Milling Council which represents all of the milling companies has told all the politicians to back off – but they probably won't.
HONG KUOK WRITES TO QUEENSLAND POLITICIAN
Kuok Khoon Hong, Chairman and CEO of Wilmar is reported to have written to Deb Frecklington who is a QLD MP and senior politician to complain about Wilmar's treatment from "some quarters". Hong is the nephew of Robert, the most famous of the Kuoks in the Far East sugar industry. The letter was apparently a response to a letter from Ms Frecklington telling Hong he should personally negotiate the cane purchase contracts(!).
MACKAY SUGAR PREPARES FOR SHAKE-UP
Mackay Sugar, the last remaining Australian owned sugar company in that country, is looking at increasing the levy on its canegrower/owners and selling off assets. The company has about Aus$200 million of debt and one obvious target for sale is the new electrical export station at Mackay factory.
CONTROVERSIAL RESERVOIR PROPOSED FOR SOUTH FLORIDA
A controversial proposal to take 60 000 acres [24 000 ha] of the Everglades Agricultural Area to build a reservoir has been under discussion in the state for a while now. Most vociferous opposition is coming from the sugar coop farmers although one suspects that the major players are probably fighting harder behind the scenes. Proponents say that the reservoir will solve the pollution caused by having to release water from Lake Okeechobee but that pollution comes from the population to the north, not the sugar industry.
COSAN PUSHING FOR HIGHER SUGAR TO ETHANOL RATIO
Cosan, the Brazilian part owner of Raízen, and Brazil's largest producer is reported to be investing another US$660 to 750 million in 2017 to 18 in projects to maximise crystal sugar production as well as yield improvements. Last year its ratio was 57% crystal.