Sugar Technology
On-line News

April 2006

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Apologies for the late publishing date but frankly most of the news last month was old news re-hashed or developments from it. The key exception was the hurricane that hit Queensland.


SUGAR PRICE

The world price bounced back up last month to finish at about the 18.5 /lb level. The consensus seems to be that the current highs will not be a short term trend but are likely to stay and that perhaps we are returning to the more traditional seven year sugar price cycle.

ILLOVO

One of the developing stories was, of course, the courting of Illovo by European suitors. We revealed that British Sugar [it turned out to be ABF, its mother company] submitted the original offer and then had to publish a stop press article when Tereos [the new name for Beghin Say] also submitted an offer. Tereos recently purchased a stake in Sena sugar [Marremeo] from the Mauritian owners.

The ABF/BS offer a the cash offer for 51% of the company, the Tereos one is an asset swap for between 51% and 75% with cash adjustment if necessary. It would reverse its Brazilian and Mozambican assets into Illovo.

CYCLONE LARRY

After last year’s hurricane hits on the US sugar industry, it was Australia’s turn in mid-March [hurricanes are called cyclones over there]. Larry was a Category 5 event [the strongest possible]. It came ashore at Innisfail, about 75 km south of Cairns and therefore 200 km north of Townsville. Initial estimates indicated that 10% of the country’s sugar crop was lost, worth Au$ 200 million [US$ 144 million].

IRISH SUGAR

Following last month’s report about the closure of Mallow, Irish Sugar’s last factory, the company announced in mid-March that the closure was to take place immediately. As might be expected that triggered more recriminatory debate as to where the blame lay and how the compensation due from the EU was to be divided up. Interestingly, there are reports that up to a quarter of the local farmers will still sow beet this year.

LATVIAN SUGAR

It seems as if the Jelgava factory in Latvia is to close but the Liepaja one is to stay open, provided that the EU grants an additional production. It seems difficult to believe that the EU will grant such a thing when it has just cut quota’s by about 8.5% in order to balance the supply and demand following the WTO ruling.

CONTAMINATED SUGAR

The Lantic refinery in Montreal has had to recall some sugar as a result of contamination with ‘metallic strands’. The problem occurred with a screen but no details are available. No quantities have been stated either but the company expects the exercise to cost between Ca$ 500,000 and 1.5 million [US$ 430,000 and 1.3 million].

KENANA

We have long said that the Sudan has the technical potential to build an industry as big as – or bigger than – Brazil’s. Kenana clearly agrees with us and has stated that it wants to build a power ethanol plant and three more sugar factories.

TRINIDAD

Is Tereos also looking at Trinidad? The government there has been trying to privatise the latest incarnation of Caroni [now just Ste Madeleine factory] for some time and recently let it be known that ‘a French company’ said to be ‘one of the largest agro-oriented companies in Europe’ was interested in buying the company to build a biomass based industry.

UKRAINE

The Ukraine seems confident that it has finally brought its sugar industry under control : it is preparing to issue licenses to export sugar again after many years of being a net importer.

AZERBAIJAN

The new beet $80 million factory of Azersun has been opened but it is unclear what its capacity is. One report claims that it will produce 180 to 200,000 tons of sugar this year but another talks of there only being 2,000 ha of land under beet so one suspects that the first figure is, at best, the slice rather than the production.

INDONESIA

The government owned sugar group RNI which operates 10 factories has announced that it intends to grow jatropha in order to fire the oil from the plant instead of burning heavy fuel oil. It currently consumes 16 million litres of oil in its boilers each year : has nobody told them that they have an energy surplus if only they got their act into order?





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