Sugar Industry News : July 2017
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WORLD PRICE
Last month was very quiet in the market which might explain why the world price continued to slump :
As always a month opening graph doesn't tell the whole story. In mid-month the price was down in the low 12 ¢/lb range so get back up to just short of 14 is good. Let us hope that it continues to recover.
DANGOTE SIGNS FIRST GREENFIELD DEAL
Last month we reported that Aliko Dangote has reconfirmed his project commitments, one of which was to be in Nigeria's 'Nassarawa' state. It turns out to be Nasarawa state [with one 's'] and last month Dangote signed an agreement with the state governor to acquire 60 000 ha and to build two factories.
Nasarawa is immediately south east of Nigeria's capital, Abuja. The stated objective is to produce 430 000 t/a of refined sugar. The budget is claimed to be US$ 700 million and job creation is claimed to be 30 000.
STRANGE CLAIM RE ETHIOPIA FROM KANPUR NSI
India's National Sugar Institute has announced that it will help Ethiopia set up "ten new sugar factories". However, it goes on to say that Ethiopia only has seven factories so it seems that these are the same ten factories that Ethiopia has been talking about for many years and claiming that they were about to enter production. Everything is as clear as mud.
SOUTH AFRICA TURNING THE CORNER
South African Cane Growers’ Association is working on the basis that last summer's rains signalled the end of the drought. The 2016/17 crop was slightly higher than the previous year [sugar output was only 5,000 tons more] so let's hope that the current crop does indeed climb away from the depressing ~1.5 million tons production, heading back over the more normal 2 million tons.
INDIA IMPORTING DUTY PAID FOR LESS THAN THE LOCAL PRICE
The recent collapse of the world price has pushed the duty paid price below the local price, much to the concern of the local industry. It is reported that, in addition to the duty exempt 500 000 tons previously permitted by the federal government there is another 300 000 of duty paid at sea destined for the country.
The Indian Sugar Mills Association wants the duty to be increased from 40% to 60% and others have even called for 70%.
GRAHAM CLARK SETS TO WORK
Graham Clark, the recently appointed CEO of Fiji Sugar has set out 12 objectives for the company, together with associated strategies to achieve them. They are all very predictable with the key points being to go from 2 to 4 million tons of cane production [with an emphasis on mechanisation] and from 200 to 480 000 tons of output. That is a 20% yield improvement.
The FSC chairman is reported to have said that he wants to meet these new objectives in 3 to 5 years : watch this space!
MEXICO / US WAR OVER?
Mexico and the US seem to have reached agreement on the NAFTA sugar programme – for now. The deal is described as complex but it seems that the key element is that, in future, Mexico will only be able to export 30% of the total as refined sugar [it was about 50%] and there is now a pol definition of what is raw so that, for instance, 'estandar' sugar will be classed as refined sugar. The deal also increases the minimum prices for Mexican sugar [previous price in brackets] : 23 ¢/lb for raws [22.25] and 28 ¢/lb for refined [26].
LONG POND DREAM
It seems like yesterday but it must have actually been 6 or 7 years since the Jamaican government sold off the JSC assets, selling the Long Pond factory and leasing related land to the local Hussey family. Long Pond didn't crush last crop nor this current one and that is likely to go to court. The Husseys, however, have announced a US$ 38 million project for the factory which will establish a 14 MW power station there. Only time will tell if such a project is viable.
WORLD'S FIRST TRANSGENIC CANE APPROVAL
CTNBio, Brazil's biosecurity organisation, has approved a genetically modified sugarcane which is resistant to Diatraea saccharalis, a common Brazilian cane borer. The cane was developed by CTC. The problem will be one of markets, some of which will not accept sugar from such a modified cane, and we all know the issues that Brazil has with traceability in its always busy terminals.