Sugar Technology
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July 2003

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June seemed quiet until the 15 nations of the EU finally reached agreement on the common agricultural policy. The sugar price is still down below 7 USą per lb.


The big story of the month has to be the proposed reform of the EU's Common Agricultural Policy but don't hold your breath! The CAP, now 40 years old, was established to make Europe self-sufficient in agricultural produce [and to keep farmer-voters happy]. It currently pays out almost US$50 billion to farmers to produce foodstuffs that are not required in the EU. In the sugar sector this led to some 5 million tons of refined sugar being dumped on the world market. The 15 member countries have agreed to reforms which should result in a major reduction in output but the money will still be paid to the farmers - to grow nothing!

Watch this space!


It looks as if the Kenyan government is going to pay off the debts of its own sugar factories in order to allow them to pay their growers and move forward to a better future.

It seems as if Booker Tate's contract at Mumias will not be renewed. The existing contract ran out on June 30 but government statements about refusing to renew seemed irrelevant to the privatised company. However, during June the senior BT employee at Mumias was reported to confirm that the contract would not be renewed. It is ironic that the contract, now 30 years old, is not being renewed following the privatisation which BT nursed through.

In another strange move, the senior Schaffer employee at Nzoia [where Schaffer are due to finish in September] stated that the company would start installing equipment which had been delivered some 13 years ago. Perhaps this is related to the writing off of the debt at Nzoia.


India has apparently allowed the commercial cultivation of trans-genic cotton which has made the Japanese concerned about the nature of the country's sugar cane. Mitsui is investigating whether cane too has been subject to manipulation and therefore the raws that it imports has been 'contaminated'. Japan is very sensitive to GM issues.


It now seems that the EU has suspended Serbian sugar imports for three months while it carries out the investigation we reported last month. In theory Serbia should be exporting about 50,000 tons of sugar to the EU per year, the difference between its production and its local consumption. However, by the time of the suspension it had already exported somewhere nearer 200,000 tons since September 2002.


Western sugar, now a co-operative following the sale by Tate and Lyle, is doing well with "Financial performance through September exceeded initial expectations". The company thinks that the lean years are over and that the future of the beet industry in the US looks secure, comments made presumably in the light of the new farm bill.


The Kilombero Sugar Company in Tanzania, part of South Africa's Illovo group, is aiming to double its capacity to 200,000 tons by 2010 according to a report quoting a government minister. Domestic demand is currently nearly double that at 380,000 tons. The report gave no details of how the expansion is to be achieved but it is clear that the company wants to follow the South African model of reducing estate cane and increasing outgrower cane.


ED + F Man issued its latest market predictions for 2002/3 during June and it doesn't make happy reading. Man, a well respected London commodity house, estimates 149 million tons of production [raw value] but only a small increase in demand resulting in a surplus of 8.5 million tons. The production estimate reflects an increase of over 6 million tons since Man's previous forecast in February. The report was not all gloom however, as it predicted strategic buying to restore stocks drawn down earlier in the year while the Iraq war was on.


South Africa produced a record 2.75 million tons in the 2002/3 year but is forecasting a lower production for the current year due to lower than ideal rainfall.


Following last year's embarrassing accidental contamination, British Sugar is now selling locally produced certified organic beet sugar but has only 1,800 tons available. It hopes that sales will demonstrate a potentially much greater demand and allow it to justify further investment in the product.


Following our report some two month's ago, we hear that Luis Bento is to take up the professorial vacancy at LSU's Audubon Sugar Institute. Luis was, until his retirement some three years ago, the General Manager of Portugal's RAR refinery and is bound to bring some good process ideas to the Audubon.

We also hear that the institute is to move off campus to a facility being donated by Syngenta as that company rationalises itself. [In case you have never heard Syngenta, it is the result of merging Zeneca - itself the result of merging Astra and what was ICI fine chemicals - and Novartis, the Swiss agribusiness company.]

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