Sugar Industry News : May 2016
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WORLD PRICE
The world price continued its climb and closed the month above 16 ¢/lb and the real kept pace :
Surely this cannot keep going?
EU PRICES RISE AND OUTPUT FALLS
Because of the record production in 2014/15 the EU land area given over the sugarbeet production in 2015/16 was some 14% lower. Unfortunately the yield in the campaign now finished was also down so the total EU output was only 14.9 million tons, 24% less than the production in 2014/15. Coupled with a lack of available ACP raws for import, that has resulted in higher internal prices. The Commission reports an average price of €429 in January this year and it is known that it reached €550 in March.
HELLENIC SUGAR IN CRISIS AGAIN
Greek sugarbeet farmers occupied the EBZ facilities for about five days in April, protesting about not being paid fully for last year's beets [to the tune of €8 million] and wanting assurances that they would be paid for the current crop, now being sown. All of this happened after the complete board of the company resigned en masse.
KOMENDA SUGAR NEARING REVIVAL
The new Komenda factory [there was an old one] on Ghana's south west coast is reported to be nearing completion. However, the last project collapsed becasaue of unfavourable agricultural conditions so it remains to be seen whether this venture will be a success or not.
SUNTI GOLDEN COMPLETE
Flour Mills of Nigeria has apparently completed the construction of its new cane factory at Sunti in Nigeria's Niger state. The factory, in fulfilment of an obligation which allowed the company to build the Golden refinery in Lagos, is reported to have a capacity of 100 000 t/a and to have cost $225 million.
KENYA PRIVATISATION STOPPED BY COURT
A Kenyan court has stopped the privatisation of the five remaining government factories due to irregularities in the process. The court made the order just days before the tenders for the purchase of the five were to be made public. There is expected to be a delay of at least two months.
INDIA WORRIED ABOUT WATER SUPPLY
It is reported that the federal government in India has asked Maharashtra to impose limits on the amount of cane growing in the state because the crop requires so much water. This follows two years of poor monsoon. The state is the largest sugar producer on the sub-continent and there is talk of its output being cut back by as much as 40%
The general view is that India's next crop will be 10% lower than the one now ended but 10% means close to 3 million tons of sugar.
NEW FACTORY OPENS IN CAMBODIA
A Chinese company called Rui Feng is reported to have opened a new factory in Cambodia's Preah Vihear province up near Thailand's southern border. It claims to have spent US$ 360 million and to have the ability to produce 'nearly 500 000 tons' of sugar. It is expected that most of the production will be exported, either to China or to the EU, presumably under the EBA initiative.
NO WILMAR CANE CONTRACTS UNTIL THE END OF JUNE
As we predicted in January and reported subsequently, the trouble over the new cane law in Queensland continues. Wilmar – owner of Sucrogen as was – is now saying that it won't even be able to table a draft purchase contract for next year until the end of June when normally the contracts would have already been finalised. The cane growers seem to be getting very anxious.
JAMAICAN GOVERNMENT INTERVENES
Jamaica has agreed to temporarily take over Long Pond and Monymusk for the 2017 season [which presumably means the crop starting later this year]. It is not that long ago that the government sold the estates to the private sector so the industry must be in a very bad way. We can presumably expect more bad news to come. Part of the rationale is that Appleton is banned from operating by a court order because of water pollution issues downstream from the factory.
There is one positive bit of news : the government is starting a 300 ha green harvesting experiment which we take to mean a mechanical harvesting experiment.
BRAZIL START LOOKS GOOD
Conditions in Brazil have been very favourable with UNICA claiming that the crop is about a month ahead of schedule due to the early start and good conditions. It reported that 205 mills were already crushing by mid-April compared to 165 at the same time last year.