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 E-mail link at the left.
May was a mixed month but with some optimism - tinged with some pessimism - over the sugar price. A hot rumour failed to make the wires.
WORLD SUGAR PRICE
The London office of Sucden is forecasting a major change in sugar prices over the next few months, moving from the 6 to 7 US ¢/lb range to the 8 to 10 US ¢/lb range. The forecast implies that this could be a long term change rather than a short term one caused by temporary factors.
GLOOMY BRAZIL MODEL FROM ISO
The ISO is predicting that Brazil’s sugar exports are likely to grow by 4% per annum until 2010, despite an increasing uptake in ethanol as Volkswagen’s ‘flexi-fuel’ technology spreads. The one factor not taken into account in preparing the model appears to be the crude oil price which was over $42/barrel for part of May. If it stays up there then there will be a move to divert more sugar in cane to ethanol.
British Sugar’s regional manager for China [the company has interests there that rank fifth in terms of the country’s sugar production] has predicted that China will be importing three million tons per year by 2010.
Moçambique is forecasting a 20% increase in production for the current crop. Last year’s production was 212 000 tons but this year it is expected to be over 250 000 as the industry continues to recover from the bad years of the civil war.
Indian production was only 16 million tons last crop against – a demand of 18 millions – and it is expected to be lower still next crop. However, there is a strategic reserve of 9 million tons so the government is saying there will be no imports. The problem is that nobody believes them, preferring a scenario where the government reduces the import duty from 60% to 20% for a declared top-up amount. If that happens and the quantity is substantial then presumably we can expect the world price to rise. It was up above US 7 ¢/lb at the end of May.
BT : NO SMOKE WITHOUT FIRE?
The grapevine was humming in the second half of may with stories that Booker Tate was being sold by Murray and Roberts to the [relatively small] South African sugar group TSB. Strangely, the wires were silent but there is no denial from M+R. The group only brought the company about four years ago, since which it has lost its Mumias management contract. The purchase might make sense for TSB as it has been trying to establish a new estate in Angola for some time but do you really need BT to do that?
The government in Zimbabwe has announced that it is going to take over Triangle Estates as it continues to forcibly acquire land for the settlement of so called ‘freedom fighters’ [who were too young to have fought in the 1970’s]. Interestingly the announcement was made at a Workers Day rally in triangle where the news was not at all well received.
Statistically, the country is still expected to produce 525 000 tons of sugar in the current crop, albeit from a reduced amount of cane. It will be interesting to see if this is achieved.
EU, US AND WTO
The EU and the US, the bogeymen of the WTO, both offered to make substantial changes to their trade regimes – provided that everyone else did too. Both want the current round of talks [Doha] to gain impetus but will not move unilaterally.
The EU offered to reduce the CAP budget by over $3 billion but that needs to be seen in the context of a ~ $50 billion total. Sugar would be one of the main crops affected. The British government commented that Franz Fischler, the EU agriculture commissioner, would be hard- pressed to meet his autumn deadline [when he retires] for an agreed blueprint for the EU sugar regime without ``significant progress'' at the next WTO meeting. The French Government declared that the EU was outside its mandate in making the offer in the first place.
SERBIAN SUGAR SCAM
The EU has announced that the Serbian scam of exporting non-Serbian sugar to the EU involved up to 150 000 tons. It is now seeking compensation for the taxes thus avoided.
USA v MEXICO
The sugar wars are on again as it looks as if the sweetener talks have floundered again although one hears different comments about the cause of the current deadlock, each side blaming the other. The US has a WTO hearing pending against Mexico for its HFCS tax when the WTO is contemplating Australia / Brazil / Thailand hearing against the US sugar regime.
Following on from last month’s article, sugar is back on the free trade list between Belarus and the Ukraine, but only from 2007. There is also a broader agreement involving Russia but that is an agreement about the need to agree between them a common policy for sugar.
Illovo has been quietly briefing people about its desire to sell Monitor for some time but received no offers. Last month it announced that it was in talks with the growers to convert the company into a co-operative which would give the operation certain tax advantages.
What came as more of a surprise was it’s announcement that it had sold its Gledhow factory in South Africa to a ‘black economic empowerment’ group. The South African Sugar Association has announced that it wants to see 30% of the cane crushed in South Africa grown by black people but the sale of a factory is another story. Illovo will continue to operate the factory on a contract basis for the next five years.
VIETNAM RETURNS TO IMPORTING
Vietnam has decided to import sugar after four years of self sufficiency although some people are claiming that it is only an anti-profiteering measure as some traders hold back sugar in the expectation of a price rise.
As the potential South African beet sugar project continues to stagger along, it now looks as if Tasmania is going to try the same – but to make power ethanol, not sugar. Like South Africa, any beet sugar produced would just displace domestic cane sugar on to the world market so ethanol may be a better choice.
SCJ STILL LOSING
The Sugar Company of Jamaica is still reporting losses although they are significantly down from the US $ 11 million lost in the previous year. Ever optimistic, the company is projecting a 9% improvement in its TCTS figure for the coming crop.
SONY TO EXPAND?
The Kenyan government has announced that it is going to expand Sony from 3000 tcd to 5000, by 2005. Perhaps the factory is already partly capable of that throughput as even the end of 2005 seems an ambitious programme.
DUPONT TATE + LYLE BIOPRODUCTS
Dupont and T+L have formed a joint venture to manufacture 1,3 propanediol, the monomer for Dupont’s Sorona polymer. T+L has been committed to [renewable] carbohydrate chemistry as an alternative to hydrocarbon chemistry since the 1970’s but lost its way in the 1990’s. This new enterprise may be the start of a replacement programme long dreamt about.
TRANSGENIC BEET : LESS ENVIRONMENTAL IMPACT
A study at the University of Reading in the UK has concluded that herbicide tolerant sugar beets would be less harmful to the environment and human health than growing conventional sugar beets. The study seems to have assessed all aspects of the environmental impact of beet agriculture. Because less herbicide is used overall, the savings in making transporting and applying it all contribute to the transgenic advantage. The full article is available at the Plant Biotechnology Journal web site.