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March was very much a mixed month with quite few crop forecasts and other production data.
BRAZIL UP AGAIN
It looks as if Brazil’s sugar production will be up again in the new accounting year. Last year’s Centre- South crop was about 300 million tons of cane and this year it is expected to reach 320 million. The sugar production is less simple to predict as it depends on what the factories do about the sugar / ethanol split but the best estimate at the moment is over 22 million tons of sugar [a 10% increase] and over 13 billion litres of ethanol.
CHINA EXPECTED TO REQUIRE CONSIDERABLE IMPORTS …
Analysts are predicting that China will need to import between 1 and 1.5 million tons of sugar this year although the difficulty of getting hard data about the domestic production – or, indeed, demand – makes it hard to be certain of the figures.
… WHILE INDIA IS NOT
This year’s crop in India is known to be down about 20% from last year’s record but the analysts are not forecasting significant imports because of the adequate stocks held in the country. Current reported figures are 15.5 to 16 million tons of production [compared to last year’s 20 million] with demand at around 18 million tons. However the country is understood to have about 10 million or about 7 months of strategic reserves built up over the last few years.
SUGAR PRICE RISE PREDICTED
Citing a lower crop in Australia and China’s continuing high demand, at least one bank is predicting a sugar price of 8.5 US ¢ / lb by 2005, a 30% rise over current prices. It was a mixed month for the sugar price though with physical movements depressed by the high global freight rates. At one stage the price hit a seven month high but then plunged back again.
Following on from last month’s news item about TH and the lay-offs [which, we understand, have not yet been completed], the group’s production figures were recently published. Its South African operations produced only 652 000 tons in the 2003 year, down 25% on the previous year. Luckily, the Southern Africa operations were up although Triangle did slump by 9%. However, considering the conditions in Zimbabwe, Triangle’s production of 264 000 tons is excellent and deserves much praise.
The local sugar industry is reportedly suffering badly in the Ivory Coast’s civil war with reported losses of over $25 million. What is not clear is how much sugar is still being produced as the sugar estates are mainly in the north, an area firmly in the control of the rebels.
Poor Cuba continues to struggle, despite brave headlines [“Central Camaguey First Province to Reach 200,000 tons”]. Analysts seem to be saying that the crop will be no bigger than last year and certainly will not reach the 2.6 million ton budget. The problems are, of course, across the board with a lack of fertiliser, operating machinery or even spare parts.
On another front, it is reported that Cuba is providing the engineering for the new sugar factory being built by Venezuela’s President Chavaz in his home state of Barinas. There is a close link between him and the Cuban President.
UKRAINE TO BAN SUGAR TOLLING
For some time now, the Ukrainian industry has been earning sugar by toll refining for third parties who have imported raws and re-exported the refined sugar, paying for the work with some of the refined sugar. This has helped cover the 4 to 500 000 ton shortfall in domestic production but has made it virtually impossible for the government to keep track of strategic reserves. Tolling has therefore been banned from the middle of this year.
An article on the wires in March reported Barbados’ Minister of Agriculture simultaneously denying and confirming the demise of the domestic industry. He was quoted as saying that a production of 50 000 t/a is unlikely to be seen again but seemed to pin his hopes on a ‘fuel cane’ project, presumably a high fibre cane which would yield some sugar but would also increase the export cogeneration potential of the factory. We say ‘the’ factory because the country clearly has to rationalise down to that.
HFCS TO BLAME FOR OBESITY?
A new report into obesity in the USA is suggesting that HFCS may be partly to blame. Being monosaccharide based, the sugars are more readily absorbed and used by the body than sucrose so they are being blamed for the acceleration of obesity [but not the obesity itself]. It makes a change to see sugar being let of the hook.
Peru is reporting a drop in sugar production for the current year, citing a ‘severe drought’. The latest forecast is 902 000 tons of sugar from 8.3 million tons of cane grown on 75 000 ha of land. The crop may be down but there must be many of our readers dying to have conditions like that – and remember that those are the average for the whole year. If the country manages to recover from all those years of ‘land reform’ the figures will be truly remarkable.
NEW EVERGLADES DISPUTE
It looks as if we are about to see another dispute between the Florida sugar industry and various authorities. When Talisman shut down in 1999, it was specifically to return the land to the Everglades – eventually. The Government [which bought the land from the then owners] leased the land to the remaining sugar companies on terms which required notices and actions on the part of the authorities. It seems that the notices have been served without the necessary actions : watch this space.
RSA BEET STILL ALIVE
It would seem that the Eastern Cape beet project is still alive and kicking. The regional government has allocated ZAR 5 million [± $750 000 at today’s rate] to expedite the project, citing future job creation as the main reason to contributing to the project. That it would probably require an equal number of job losses elsewhere in the country seems to have been overlooked.