Sugar Technology
On-line News

May 2014

Welcome to our news page!

We try to bring you the latest news and comment on this page but it will always be a better place if you send us your news. You can write to us by clicking on the Contact link at the left.

Quite a 'newsy' month for a change :


The New York #11 price stayed in a narrow, mid 17 /lb, range throughout April but one hesitates to call what will happen next with more and more expectation that India’s exports will substantially reduce. The USDA, for instance, is forecasting India’s domestic consumption at 27 million tons in 2014/15.


The consensus seems to be that the EU will be a net exporter after 2017 when the current sugar regime will cease to exist. People are talking of more HFCS production with the displaced sugar being exported.


The Al Nouran project has been around for a long time. When we told you about it in 2010 it was already 3 years old. It was to be a $335 million hybrid beet factory and raws refinery in the northeast, apparently near Damietta. The initial capacity was to be 500 000 t/a white sugar [with a doubling planned for 2015] of which roughly half will be from beet. It might finally be coming to reality with an announcement from the private sector arm of the IDB that it was offering up to $46 million for what is now a $357 million project.


Addax Bioenergy, a sugarcane to ethanol project with electricity export capability, started production last month. The project is in central Sierra Leone and is reported to have cost €267 million [about US$350 million] including agriculture. The estate is 10 000 ha and the factory is expected to produce 85 million litres per year of ethanol and to export about 15 MW to the national grid although it is unclear over how much of the year that will occur.


Don’t all yawn at once [probably again] but the government of Kenya has said that it will sell 51% of the five remaining government factories ‘starting in April’. They clearly didn’t finish in April : there was no follow up news on the subject. It is probably correct to presume that the government realises it won’t get any more extension of its protection for its sugar industry from the COMESA free trade agreement.

Interestingly, the local authorities in which the sugar factories operate soon started demanding the right to buy shares in ‘their’ factory [by which we assume they mean given shares] but most strange was that where Mumias operates demanding shares – in a company which was privatised and quoted on the stock exchange many years ago.


The Deep River Beau Champ factory on Mauritius has now closed, reducing the number of factories to just four : Bellevue, Flacq United, La Baraque and Medine. When one remembers that there were still 17 factories as late as 2005 that is a remarkable statistic.


The Arabian Sugar Company has confirmed that its Bahrain factory is operational at about 50% of its design capacity of 1800 t/d [thought to be melt] as it ramps up to full capacity. It expects to be producing at full capacity by the end of this year.


India is in trouble with WTO over its current export subsidies which is ironic when you remember that it was one of the countries which took the EU to the WTO some 10 years ago because the EU was subsidising exports …. It started by brazening out the onslaught but by mid-April it said that it was reviewing the scheme, effectively saying that it would leave the problem to the next government [the country is in the middle of elections] : vote for me now because I have helped your sugar industry and never mind what happens after I am re-elected.


The government of Sri Lanka has announced that Sevenagala and Pelawatte made about $11 million profit in 2013, companies that it forcibly nationalised in 2010 after privatising some years before so that it didn’t have to invest itself in refurbishments. One wonders how long it will be before the operations collapse again.


Wilmar has announced that it has purchased 55% of a Burmese sugar producer for an undisclosed price. We have no idea how many factories there are in the country but production seems to average about 200,000 tons per annum and Wilmar states that the two which it has purchased have a potential daily crushing capacity of 4,000 tons and an annual production capacity of 65,000 tons.


Australia and Japan signed a new free trade agreement in early April but, despite the Australian government’s claim that sugar is included, the growers are not at all happy. They point that whilst the tariff has come down from 184% to 110% that doesn’t really affect Australia’s industry which only exports ‘J grade’ sugar to Japan and the tariff on that remains the same under the agreement at 70%.


One suspects we are hearing the death knell of QSL. In March we told you that Mackay has contracted to sell about one third of its sugar through Brazil’s Copersucar and asked if this the beginning of the end for QSL. Early last month Wilmar [what was CSR and then Sucrogen] announced that it would not renew its contract with QSL when it comes up in June this year. That would mean that Wilmar would be selling its own sugar in 2017 and it produces about 2 million tons, by far the biggest producer.


The far north of Queensland was hit by Cyclone Ita last month, apparently doing considerable damage to the crop. It came ashore near Cape Melville which is north of Cairns but unfortunately it then turned and ran down the coast, more or less as far as Mackay before heading off-shore again. Canegrowers is talking about damage to 90% of the crop [which does not necessarily equate to 90% loss of course].


Barbados has moved one step closer to the future by closing the Andrews factory, leaving just Portvale operational. It is stated that this is so that Andrews can be developed as a new factory on modern lines which will become the factory on the island but one has one’s doubts.


There was a flurry of activity in late April when the Wall Street Journal reported that Bunge was in the process of selling its Brazilian sugar interests, quoting the outgoing CEO of Bunge Brazil as saying ‘when we reach the moment (of closing a sale) we'll announce it’. The Bunge PR machine sprang into action and the Journal changed the article because ‘the company was in the middle of the reviewing its options for the unit’. Bunge has about 2 million tons of origin in Brazil.