July 2012 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. a somewhat non-descript month : WORLD PRICE Last month we posed the question of whether the price would rebound off the 19 ¢/lb low or continue to fall. It seems that the answer is a re-bound, at least in part driven by the weather stories that you can read below : 
June closed at about 21.8 ¢/lb so the long term prognosis must surely be for the price to stay above the 20 mark? INDIA It looks as if the final count for the current year’s crop in India will be 26 million tons of sugar produced. What is not looking nearly so good is next year’s crop, for a number of reasons. Although it is early days, this year’s monsoon is not looking promising with a lot of red [deficient : 20 to 59% below normal rainfall to date] and yellow [scanty : 60 to 99% below normal] on the official map. In Maharashtra, India’s largest sugar producing state, the government is also reported to be talking of a major reduction in the land area under cane : from over a million hectares down to about 800 000 ha, a change of some 22%. If that is typical of the country as a whole then sugar production will fall from 26 million tons to nearer 20 million and several million tons below its internal demand. MALAYSIA Malaysian refiner MSM has announced plans to expand its current 1.1 million tons capacity with an investment of $28 million. More importantly it has set aside $31 million for what it calls ‘upstream investment’ – investing in raw sugar production. The company says that it is considering targets in Indonesia with others in Myanmar and Cambodia as possible. AUSTRALIA There is also talk of rain disruption in Australia where harvesting has been suspended in about half of the factory locations from the far south right through to the Burdekin. In this case, though, everyone is expecting the industry to deliver a normal harvest by the end of crop with predictions of about 4.4 million tons produced. ORD RIVER PROJECT We thought that sugarcane was no longer considered viable in Australia’s Ord River valley but it seems that our assumption might not be correct : 18 different varieties of cane will be grown there this year according to the Western Australia’s department of agriculture. US FARM BILL Every five years sees a major political battle in the USA as the Farm Bill makes its way through the legislative procedures. It is key for the country’s sugar industry because it enshrines the protection that the industry needs to make a profit. In June it passed through the Senate, the upper house, some $2 billion a year lighter than in the past but with the sugar industry provisions untouched. It now goes to the lower house where it is expected to pass more or less as currently drafted although not without a few fights. AMERICAN CRYSTAL It looks like there is no end in sight for the lock-out at American Crystal : the company says it will not change its offer and the workers again rejected the offer [for the third time] towards the end of June. TOWER HILL Details of ASR’s proposed purchase of BSI are becoming clearer. As part of the deal [or maybe all of it?] ASR will clear the company’s debts, including dividends of $5.2 million owed to the employees’ trust, invest $40 million in the factory and $20 million in the fields. BRAZIL The unseasonal rains carried on through June in Brazil, threatening the crop recovery previously forecast. At the end of May the crop was down 26% on the previous year’s figures [which, quite frankly, were very bad]. At the end of June, sugar production was down 28% on the previous year at only 4.9 million tons and ethanol production was down even more at 33% below last year. No doubt the rains will eventually abate but will the country be able to catch up the lost time or are we heading for a year of standing cane as happened not that long ago? What was of particular note was that Copersucar actually bought over 100 000 tons of sugar on the world market towards the end of June : things must be really serious. EGYPT Another proposed project has been announced for Port Said but the something doesn’t seem right : Egypt's Industrial Development Authority is claiming that it will produce 354 000 tons of sugar each year of which 90 000 will be from cane and 130 000 will be refined. It is not only the numbers which don’t add up : cane is unlikely to grow commercially around Port Said. UGANDA SCOUL, the smallest of Uganda’s three producers, has announced an expansion plan to double its production from 50 000 to 100 000 t/a. ALTEO Last month we told you about the merger of Beau Champ and Fuel to form what we are told is to be called Alteo but we were not certain where TPC in Tanzania fitted into the picture. It is now clear that TPC is part of the deal and that the new company intends expanding production there by 10% ‘in the near term’. RUFIJI SUGAR Following on from last month’s news item, another company is claiming to develop a sugarcane project at Rufiji in Tanzania. This time it is the Egyptian African Company in partnership with the local Agro Forest Plantation and clearly it is not the same project as the one reported last month : this one is rated at 750 t/d of sugar [of undefined quality]. The project’s capital cost is reported to be $200 million. HIPPO VALLEY Hippo was always more susceptible to poor farmer performance than its near neighbour Triangle because of its smaller core estate. This proved to be the case when the Zimbabwean government stole the farmers’ land and handed it to its cronies : output crashed. The latest production figures imply that the new farmers have learnt how to farm cane successfully : 372 000 tons of sugar were produced in 2011 across the two companies and the estimate for 2012 is between 450 and 500 000 tons. However, you have to remember that the Green Fuel project in Chisumbanje is currently sending its cane to them and it turns out that Hippo is effectively farming for the new farmers, ploughing out their land and, by the sounds of it, paying for it too. The question is : what happens when the cane needs ploughing out again? 
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