June 2011 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. Things heat up down under ... WORLD PRICE The world price went further down last month before bottoming out at about 21 ˘/lb before bouncing back up a bit : 
At the time of writing it is showing signs of continuing to climb whilst analysts argue over the outlook and try and predict the world’s output in the coming 12 months. Kingsman dramatically increased its forecast for 2011/12 from 2.4 million surplus to a 10.5 million surplus but there are already indications of Brazil being lower than expected. In addition, ED&F Man point out that stocks are very low after the last few years of shortfall and that countries will need to re-stock, providing a level of price support : watch this space! EUROPE As expected, the EU voted last month to import another 200 000 tons of sugar on a duty-free basis as it struggles to balance its books after the disastrous winter just past. That takes the total imports to 500 000 tons. HELLENIC SUGAR Hellenic Sugar is up for sale as the Agricultural Bank of Greece, along with everybody else in the Greek economy, scrambles to restructure. Both Nordzucker and Südzucker have been mentioned as possible purchasers. ED&F MAN Südzucker has agreed to buy 25% of the shares of London’s ED&F Man for $255, valuing the trader at over $1 billion. Admittedly the company does have some capital assets but it is fundamentally a trader. It will be interesting to see whether the assets are moved across to Südzucker of not. INDIA India is talking up its crop for next year on the basis of land under cane increasing from 4.98 to 5.47 million hectares. It is predicting a total crush of 380 million tons [346 million last year] and production of 26 to 26.5 million tons, both based on typical conditions. The figures are dominated by UP with 42% of the area under cane and Maharashtra with 16.5%. As always, one has to be careful with data coming out of India and it is worth noting that the country’s consumption – the highest in the world – is probably over 25 million tons by now. SRI LANKA The government in Sri Lanka seems to want to re-start Kantale Sugar in the north east of the island. It reports that it received 25 expressions of interest from potential investors following a recent tendering exercise. Operations at Kantale ceased in the mid 1980’s presumably because of the civil war in the north of the island and the activities of the infamous ‘Tamil Tigers’. Meanwhile it looks as if Pelwatte Sugar is about to change hands with the local Distilleries Company buying 47% of the shares. INDONESIA Indonesia is predicting a return to recent production levels in 2011 after last year’s poor crop. Production in 2007 to 2009 was always above 2.8 million tons but it dropped to 2.3 million last year; the prediction for 2011 is 2.7 million tons. What is not believable is its objective of being self-sufficient by 2014 : domestic demand in 2009 exceeded 5 million tons. TULLY The battle for control of Queensland’s Tully Sugar heated up considerably last month with the shareholders voting for a motion to allow shareholdings in excess of 20%, Mackay Sugar putting in a bid supported by Louis Dreyfus, all three bidders increasing their offers to Aus$43 per share and QSL publically accepting the Mackay bid for its almost 20%. Perhaps we are approaching the end game? PROSERPINE Sucrogen, what was CSR’s sugar division and now owned by Wilmar International, has agreed to buy Proserpine Mill for Aus$115. Proserpine has an annual crush of about 2 million tons so that will take Sucrogen’s total crush to about 17 million tons and sugar output to about 2.2 million tons. Mackay Sugar, which wanted to somehow merge with Proserpine, expressed regret but with its current battle for Tully it is probably somewhat relieved. FIJI Fiji is saying that the US$ 86 million spent on the recent refurbishment of its four mills by India was wasted money because the upgrades ‘failed miserably in delivering promised performance’. It has allocated a further $123 million to do the refurbishment properly, almost certainly with technical support from Tate & Lyle. FSC signed a 12 month supply agreement with T&L last month. TRANSGENIC BEET The Ninth Circuit Court of Appeals in the US has upheld the original findings of the Californian court that more environmental impact studies are required for transgenic beet. However, it doesn’t seem to mean much as the USDA has authorised sowing of the 2011 crop and of the stecklings which will produce the seeds for 2012 under special controls. T&L BACK TO JAMAICA Tate & Lyle Sugars, now owned by the Fanjul controlled ASR, is back in Jamaica offering a five year contract for up to 200 000 tons of raws. SCJ is, of course, about to become owned by China’s Complant International but there are the smaller producers too as all of the sugar is sold via the island’s Jamaica Cane Product Sales. GREEN FUEL ZIMBABWE It seems that the Green Fuel project at Chisumbanje is about to be commissioned, a few months later than originally claimed when we first reported it last December. The plan is to initially produce at a rate of 300 000 ℓ/d but to climb to 850 000 by 2014. Electrical sales are predicted to start at 18.5 MW and climb to 35 MW at full production. That will require 11 500 hectares of sugarcane this year, 16 000 hectares next year and 21 000 hectares by the end of 2013. The project is controlled by Billy Rautenbach, an associate of Robert Mugabe, and is mired in controversy about local people displaced to create the necessary land. BIOMASS TECHNOLOGIES Biomass Technologies, an Australian company, has been granted a patent in the US for its ‘BT10’ sugarcane processor. The company claims that the processor separates sugarcane into ‘clean fresh juice’ and ‘clean dry fibre’ without any imbibition water and with significantly reduced energy compared to traditional cane processing. The first pilot scale unit is about to be put into service in northern Queensland. You can read more about the technology on the company's web domain. 
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