Sugar Technology
On-line News

May 2009

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Florida is at last calming down again ...


The world price started to kick up during the second half of April and seems set to continue upwards with the Indian crop forecast continuing to fall [see below]. People are talking of prices being as high as 20 ¢/# by the end of the year – but then we have heard that talk before. It finished April at about 15.5.


The latest forecast for production in India this year [2008/9] is from Czarnikow : only 14.7 million tons [and almost as low as the 12 million figure just four years ago] following the 28.6 million in 2006/7 and the 26.3 last year. The Czarnikow estimate is over 1 million tons less than the previous estimate by the millers’ association just 4 weeks ago.

As predicted last month, India imported nearly 100 000 tons of raws in recent times and has contracted to buy close to 1 million tons, about two thirds of that by Renuka Sugars.


Jamal Al Ghurair’s proposed refinery in India has again been turned down by the Indian government without any real reason for doing so. Most of the argument seems to relate to what grade of sugar would be exported from the refinery.


The USDA, in its latest report on the Chinese sugar industry is reporting a 15% reduction in this year’s crop to 13.5 million tons [raw value from both beet and cane] compared to last year and is predicting a recovery in 2009/10 to 14.5 million tons. The reduction is blamed on unfavourable climatic conditions.


The revised deal for the state purchase of US Sugar land, reported here last month, was firmed up during early April. The state now intends to buy 72 500 acres [29 340 ha] of land for a price of $533 million – a far cry from the original deal price of $1.74 billion. The state will still have a 10 year option to buy the remaining 107 000 acres but no details are available.

Meanwhile, in a vaguely connected case, the majority of claims made by shareholder employees against the company for not disclosing earlier bids to buy the company were thrown out by the court.


The situation surrounding the Savannah explosion over 12 months ago is getting even more complex, just as Imperial announced that it expected to start refining again in mid June this year with the packaging plant complete by the start of the last quarter.

The first point was made by the subsequently fired plant manager to a Senate hearing claiming he had warned the company of the explosion hazards on site just two days before the explosion. The company then claimed that its computer experts could show that the warning was written a few days after the event, something that was then repudiated by the man himself [or rather his legal team].


It seems that a potential joint venture investor has pulled out of investing with the Colombians in the conversion of Louisiana’s almost new thick juice plant at Lacassine. The company has stated that it will not operate the factory this coming crop so that it can focus on the conversion to an ethanol plant. The local cane will be transported to the factories further east along the banks of the Mississippi.


Following our March note about the Verenium / BP joint venture, more information is appearing about the proposed project in Highlands county, Florida [just north and west of Lake Okeechobee]. It seems that the project is founded on sweet sorghum production and the capacity now seems to be just 75 000 m³ per annum, not the 136 000 previously reported.


Even while the latest tenders for the privatisation of SCJ are under review the government has announced a US$ 20 million programme to reform the industry : money seems to emanate from the EU. The overall objective is reported to be a transformation to sustainability by 2015 : something which history would predict to be impossible without changing the mindset of the nation.


The extreme socialist government of Venezuela has made its next move against the country’s sugar industry by taking over a sugar mill at Cariaco in the state of Sucre, some 370 km east of Caracas.


The government is predicting that perhaps none of the 15 new mills scheduled to come on line this year will actually start crushing due to the economic climate. It is also reported to predict a levelling off of land area planted to cane at 7 million hectares (!). There is also talk of the government [a party to the WTO case against the EU subsidising its sugar industry] supplying working capital for the industry, in particular the ethanol producers.

However, the government is also predicting a large increase in sugar production this year as existing planting increase work through and factories bias production away from ethanol. Last year’s production was 31.6 million tons and the current year is expected to be anywhere between 36.4 and 37.9 million tons.


Illovo, now controlled by British Sugar, seems to be reducing its involvement in the South African industry while expanding outside of the borders. Apparently it has confirmed the sale of its Umfolosi factory to a local cooperative [it doesn’t seem that long ago that it bought the factory from a cooperative?] and has sold Pongola to TSB, subject to regulatory approval. On the other hand it has apparently bought 30% of Gledhow back from the ‘black empowerment’ company that it sold the mill to not three years ago.


Moçambique looks set to reap the benefit of the EU’s EBA and Green Energy programmes. Confirming the data previously reported here, the government is predicting an annual production of 440 000 m³ of ethanol from the two approved projects [Procana and Principle Energy] with somewhere between double and quadruple that figure from the applications currently under consideration.


It looks as if the Sucralose patents have been busted by the Chinese : not surprising really as the original patents were granted back in the bid 1970’s. The International Trade Commission has recently upheld an earlier ruling that a Chinese company is free to produce tri-chlorogalactosucrose. The real question, however, is whether it can do so without including some of the unacceptable co-products of sucralose production.

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