Sugar Technology
On-line News

July 2004

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June was another one of those ‘no news’ months with lots of speculation [particularly about the EU’s plans for sugar which are expected to be released this month] and local chatter – as you will see below. The good news is that the world price almost broke the 8 ˘/lb barrier towards the end of the month and showed no real sign of stopping ...


As you read this it may already be announced but in June the London Financial Times forecast that, in his last act as Agricultural Commissioner, Franz Fischler will announce a major overhaul of the EU sugar regime in July. The forecast is that the guaranteed price will be cut by one third between 2005 and 2007, resulting in the output [presumably for the ‘old EU’ of 15 members] dropping from over 17 million tons to about 14.5 million. Whether he succeeds is debatable as sugar has always been a difficult political issue in Europe.


Is the winding down of the Taiwan sugar industry getting out of control? Last month the government had to order the import of up to 50 000 tons of refined sugar despite having its flagship refinery in Kaohsiung. The refinery was built to take over from the local production which the government wanted to close down in order to grow more rice and free up more land for housing development.


Following last month’s comment about TSB and Booker Tate, there is still formal news but the Angolan government has announced that TSB is to invest $250 million in a sugar estate in the country’s Zaire province. Don’t rush to help though as the investment is only due to start in 2006 and to be completed in 2011.


The development of a new sugar factory, San Antonio on the Philippine island of Pinay, has finally reached the news wires some 13 months after we first reported it here. The factory is named for the late sugar trader and business man Antonio Chan and it was his daughter, Teresa Chan, who recently presented the plans to President Arroyo. The factory is expected to start crushing in 2005.


It looks as if Sony might actually be making progress in its attempts at reform : it has made finally made a trading profit [after 20 years of losses] and has paid all of its debts to cane growers for the previous year. Let us hope that it continues to improve.


South Africa’s sugar exports dropped in value by nearly 50% last year. The reasons seem to be a mixture of the low world price, a lower quantity of sugar for export and the strength of the rand. As the currency has continued to strengthen subsequently the country will struggle to improve its position.

Meanwhile, at its AGM, the South African Sugar Association even went as far as warning the government that the country could not afford any more sugar producers, presumably an attempt to derail the proposed Eastern Cape beet sugar project. An interesting comment as we understand that Tongaat Hulett, one of the two big cane sugar producers, is working as part of the team looking at the beet project again.


The Caribbean island of Barbados seems to be facing up to the demise of its sugar industry if the interview on the wires by BSIL is anything to go by. Already down to 2 factories producing just 35 000 tons of sugar from 7 500 ha, there is talk of just one factory and certainly no increase in output as cane land is sold off for development. In the 1950’s there were over 30 000 ha of cane producing more than 200 000 tons of raws.


The Federal Government in Australia has started handing out Aus$ 25 million in grants to encourage the production of bio-ethanol. Five ethanol plants are planned and at least one – Rocky Point – is going to a cane factory. What is not clear is how the cane purchase agreement [based on first expressed juice] will hinder the full development of a cane ethanol industry along the lines of that in Brazil.

In another article on the wires, an analyst was remarkably bullish about the Australian industry, citing a weakening of the Aus dollar and the rising world price of sugar.


The sale of Monitor Sugar by Illovo took another step forward last month with an ‘agreement to agree’ between a co-operative of Monitor growers and the Michigan co-operative which was formed two or three years ago. Michigan is twice the size of Monitor and has the valuable experience gained when it was transformed into a co-op. The two combined would have an annual acreage of about 180 000 acres.

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