Sugar Technology
On-line News

July 2009

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Nothing particular this month ... just all round news :


The world price nearly reached 18 ¢/# towards the end of June although it has fallen back below 17 ¢/# as we go to press.

Following last month’s news item, Czarnikow have now delivered their views on the annual deficits and they are greater than those from Kingsman. Based on a modest rise in 2008/9 demand and a dramatic 20 million ton fall in production, it predicts a 15.6 million ton deficit this year. For 2009/10 it sees Brazil’s production up by 4.5 million tons and India up by 5.5 million as it starts to recover but it still predicts a deficit of 6 million tons for the year.


Indian production might not be so bad as previously forecast : the federal government is now saying that the figure for 2008/9 will be 15.8 million tons rather than the 14.7 million previously forecast. [Hopefully they are not counting the million tons of raws imported for refining?] However, next year still looks dismal [remember that the last two years were above 27 million tons] with a forecast of only 16.5 million tons.


The government of Indonesia has set 2014 as the year in which to re-achieve self-sufficiency but wants to do so by investing a mere US$ 5 million in nine state owned producers – and that investment comes with strings attached. The money will be in the form of a 10% subsidy on equipment purchases provided that the equipment is entirely assembled in Indonesia and has at least 40% local content.

It is unclear what sort of equipment is involved but it is clear that the problem lies in the fields where the cane is reported to have only 7% sucrose content [maybe 15 tons cane per ton of sugar?].


Production in the Philippines is expected to increase to 2.2 million tons in 2009/10. That is a modest increase from 2.1 million in the current year but still below 2007/8’s 2.45 million. It does mean that exports will increase substantially to perhaps 250 000 tons. The increase is put down to low fertiliser prices [on the back of a low crude oil price] and a high sugar price.

The Philippines’ government is also realising that it may have to do more to encourage the industry to develop electrical export and to produce more of the 230 million litres of ethanol needed for the mandatory 5% inclusion in gasoline. The country only produces 39 million litres at the moment.


It looks as if CSR, Australia’s largest sugar producer [it originally stood for Colonial Sugar Refining], is going to try again to divest itself of the sugar division. It last tried – and failed – to do so about five years ago but analysts are saying that this time conditions might be more favourable with sugar on the up and a general enthusiasm for agro-industries related to bio-fuels. Watch this space!


Kenana has started up an ethanol plant which is expected to produce 200 million litres a year in 2011. The project was developed with Brazilian technology but it is unclear whether any juice will be diverted from crystal sugar production or it will just run on molasses.


It looks as if the long delayed Tendaho project, in Ethiopia’s far north east and hence close to the ports, is finally under way. The first monies have been disbursed. The project is essentially being funded by the Indian government and the delay was caused by internal squabbling among the Indian contractors. The Ethiopian industry has long favoured Indian technologists even though the results have not always been good.


It looks as if the Angolan government has finally taken a liking for sugar after years of indecision : the Cabinet has approved a $270 million dollar project in the northern Malanje province. However, it seems a lot of money for a project with few details released except to say it will only employ 500 people. Angola is desperate to create jobs.


Zimbabwe Bio Energy, a company part jointly owned by Mugabe and another senior Zanu-PF officer, wants to establish a 100 000 ha sugarcane estate on Nuanetsi ranch in that country’s lowveldt and close to the existing estates of Triangle and Hippo Valley. It faces two problems : 10 000 families that were allowed to occupy the ranch’s lands under his own land reform programme; and a lack of water [which is why it was only ever a ranch].


South Africa’s Canegrowers Association has reported good progress towards its self imposed objective of transferring 30% of the cane land to black growers by 2014. Currently 17% has been transferred. On the other hand, the Sugar Association has declared itself concerned about the number of small scale black farmers pulling out of sugarcane production once they have the land. It reported that over 4 000 have already done so.


Imperial has achieved its objective with the start of the re-built Savannah refinery 16 months after the explosion which cost the lives of 14 people. At this stage it is only producing liquid sugar. Bulk crystal will be shipped soon but the packaging plant – the area where the explosion originated – will only be commissioned this coming autumn.


The sell off of JSC has started with the announcement that the first two sales, predicted here last month, have been completed. Both are on a long term lease basis for 50 years with an option to extend for a further 25 years. The Duckenfield [St Thomas Sugar Company] lease was sold for US$500 000 plus US$54 per hectare per year with the proviso that the leaseholders spend at least US$2.74 million over the next two years on factory refurbishment. The equivalent figures for Long Pond / Hampden [Trelawny Sugar Company] are $1.5 million plus $40 per hectare per year and $6.2 million over five years.

The government expects to announce the sale of the other three estates at about the time that you are reading this.


Ironically, Infinity Bio-Energy – the company that spent a big part of last year trying to raise the cash for its purchase of the Jamaica Sugar Company [see above] – declared itself bankrupt more or less at the time that the government was finalising the sale of Long Pond / Hampden and Duckenfield. The declaration, under Brazil’s equivalent of Chapter 11, gives it 180 days to try and re-structure its debts. In the meantime it is able to continue to operate its existing operations in Brazil.


Cosan, one of Brazil’s [and hence the world’s] largest sugar companies – it has an annual crushing capacity of 60 million tons – is expecting to bias its output to about 55% crystal, 45% ethanol in the 2009/10 year. That compares with an industry average in recent years which has been more like the inverse of that and when one considers that the country crushes about 600 million tons of sugarcane, that is a significant swing in world production.


Beet cyst nematode (Hereroda schachtii) has long been a problem in Europe, particularly on poor draining soils, seriously reducing the yields on infested land. The nematode cysts can survive for up to 10 years so farmers have been forced to extend their rotations to minimise the impact. KWS has now introduced a new variety [Firenza] which is somehow resistant to the nematode [or does it not exude the trace chemical(s) which trigger the cysts back into life?]. As a bonus, it is also resistant to rhizomania.


The US National Academy of Science published an interesting paper on the water footprint of bioenergy last month. In general sugarcane came out well but was beaten by sugarbeet [and it doesn’t look good for jatropha!]. In our minds though there is a basic flaw in the assumptions used : beet was ranked highly on electricity production even though it only produces that from fossil fuel burn. You can read the article for yourself on the NAS web domain.

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