Sugar Technology
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May 2011

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The world price leads the news but what to say? ...


The world price crashed dramatically during April :

World Price

It looks to be heading on downwards too so maybe we will be back to the 14 US¢/lb that we saw just a year ago.


Ireland might not produce sugar any more but that doesn’t stop farmers dreaming when the price of beet is so high. Another group is pressing ahead with a feasibility study to re-start the industry and expects to submit its report to the EU during May.


A Republican Senator has introduced a possible act which would bring the US sugar regime to an end. This is not the first attempt but the more times that an attempt is made the more likely it is to succeed. Of course, the particular Senator comes from Indiana so has nothing to lose but one can well imagine that many of his colleagues will be fighting to vote out the move.

One interesting fall-out of such a bill being passed is the potential end to sugar imports as a means of giving overseas aid. The Philippine Sugar Millers Association is one body which has picked on the threat aleady.


Complant, the Chinese group that purchased SCJ’s main assets, has made a second payment to the government in line with its agreement. The deal will only become effective once SCJ has delivered this year’s raws to Tate & Lyle Sugar under the deal established before the sale.


Because of the poor crop plus the very high sugar price, Brazil has had to import ethanol [from the USA of all places!] for its local market of late so the government has started floating the idea of some form of sugar export tax or quota limit.


T&L has finally managed to sell Nghe An, its Vietnamese factory and its last sugar asset. A local company has agreed to pay about $55 million for it after all of the potential international buyers were put off by the Grassy Shoot Disease prevalent in the area.


Queensland has imported 40 000 tons of Thai raws to make up some of the shortfall in local production last year so that the Mackay refinery can keep working. It will be interesting to see how the process people will cope with such raws, almost certainly well below the quality of the local raws they would normally refine.


Queensland Sugar Ltd, the industry’s exporting organisation, has purchased another 4.5% of Tully despite being criticised last month for interfering in the proposed take over of the company by Bunge.

In terms of the company’s future, everything seems up in the air with Mackay Sugar yet to declare any offer that it might make and a Chinese group also offering to buy the company at the same price as Bunge. It all hinges on a new vote by shareholders, scheduled for mid May, to allow any one shareholder to have more than 20% of the shares.


It looks as if COMESA, the local ‘free trade’ block might give Kenya even more time before it is exposed to the COMESA sugar regime. In theory, Kenya was granted a 4 year grace period in 2003 but that was essentially doubled in 2008 to allow the country to complete its sugar privatisation programme and give the companies a chance to establish before Kenya fully joined in Q1 2012. As privatisation has still not happened COMESA is saying that another extension could be granted if, for instance, bids for the privatisation are being opened. Somehow one doubts it.


The local Sugar Technologists’ association is reporting that the three Ugandan sugar factories are planning to spend nearly US$ 200 million between them on expansion and electrical export projects. Kakira apparently wants to increase its crush to 2 million tons per annum and to more than double its electrical output with a budget of $100 million while Kinyara and SCOUL between them expect to spend another $95 million.


What seems to be a start-up company is claiming that it will invest at least $250 million in a new sugar estate in southern Zambia, presumably somewhere in the Kafue valley near to Nakambala. The company is reported to be AGZAM Project Developers Ltd from South Africa and the plan calls for a 15 000 ha estate producing, at maturity, 200 000 tons of sugar plus 28 million litres of bioethanol.


It was seems a dangerous move, the small scale cane farmers in KwaZulu-Natal are being offered close to $10 million between them ‘to revive sugarcane farming amongst poverty struck communities’.


Royal Dutch Shell, the effective owner of Cosan, has pulled out of biofuel production from algae and is focusing on cellulosic hydrolysis with a strong emphasis on bagasse. In the end of course, it will all come down to economics.


It is almost 40 years since John Yudkin published his book with the above title, starting off another major debate about sugar and health. The wheel has now turned full circle with Gary Taubes, an American science writer, telling the world that all sugars are toxic and carcinogenic.

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