August 2011 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. Quite juicy despite the quiet period ... WORLD PRICE Having continued to climb back to 30 ¢/lb during July, sugar started to flag again towards the end of the month. 
Mind you, given the economic climate and the performance of other commodities, it did remarkably well overall. Part of that has to be the situation in Brazil. BRAZIL The Brazilian industry is in trouble with a fall in output predicted for the first time in many years. There is talk of a 6% drop in cane production but as Brazil grows something like 600 million tons of cane that is 36 million tons of cane or 3.6 million tons of sugar or equivalent. Even if there is a swing away from ethanol [which seems unlikely as the country is already having to import ethanol] that is well over 1 million tons less sugar than last year. UKRAINE The Ukraine is planning to return to its historical production levels when 1.5 million ha of land were under sugarbeet compared the current levels of about one third of that. It wants to do that in the span of [of course] a five year plan so that by 2016 it is producing 60 to 65 million tons of beet and hence perhaps 10 million tons of sugar. INDIA Perhaps we are finally going to see some progress in de-controlling the Indian industry. The government has announced its willingness to discuss the way forward and the Confederation of Indian Industry has already put forward a 6 point plan. In the end though, will the politicians put themselves at the mercy of the voters in a country where sugar is so important to the economy? KANDLA REFINERIES Shree Renuka reports that it has commissioned its 3000 t/d RSO refinery in the Gujarati port of Kandla on India’s north eastern coast [it’s only 400 km from Karachi]. It already has a 2000 t/d RSO refinery at Haldia on India’s north western coast [that’s only 300 km from Dhaka]. We also understand that Simbhaoli are pressing ahead with their refinery in Kandla. All the refineries are seen as swing units able to either refine Indian sugar for export or imported raws for domestic consumption. TULLY As expected Cofco, the Chinese company, did win the race to take over Tully, including buying the 6.9% of the shares by then owned by Bunge, one of the other bidders. Mackay, the third bidder, has said that it is not in a rush to sell its 31% stake in the company even though it is still courting Proserpine [see below]. At this stage, all is sweetness and light with talk of major expansion at Tully as Chinese capital is used to convert failed forestry lands to sugarcane agriculture. PROSERPINE Mackay Sugar is still saying that it wants to put in a bid for Proserpine but to do that it must have access to the books, something which the Proserpine board cannot do under the terms of its draft agreement with Sucrogen, the company with an agreed Aus$ 115 million bid for the company already on the table. BACITA Mrs Josephine Kuteyi, the owner of Josepdam who bought Bacita Sugar from the Nigerian government for US$ 40 million back in 2006, has been killed in a helicopter crash while flying up to the factory. MUMIAS ELECTRICAL EXPORT In January 2010 Mumias was blaming KPLC, its customer, for causing “boiler tube leaks, incomplete combustion of bagasse [and] ultimate damage to the steam turbine” because that company was insisting on reducing demand in the middle of the night. Now it is blaming “poor supplies of sugar cane to the factory, as a result of rainfall and a poor road network” for failing to meet its PPA obligations. The company is supposed to deliver 26 MW to KPLC but sometimes has only managed 15 MW. SOUTH AFRICA Both Tongaat Hulett and Illovo are optimistic about the current South African crop but as they are coming off such a low base, last year’s drought reducing the crop below 2 million tons, that is to be expected. Both groups revealed something of the group-wide plans for the future at annual general meetings in July. The emphasis at TH seems to be on bringing the Zimbabwean operations back to full production because it wants to ‘fully utilise the group’s installed capacity’. There is talk of another 4000 ha of land being back in production by next crop although it seems to be land taken from the original owners, including some at Mkwasine. The plan is to develop 850 ha a month : a challenging target. Illovo confirmed its commitment to Mali, saying that it expected to start construction later this year once financing was finalised. The rest of the emphasis was on molasses utilisation for [apparently] potable alcohol production, the first unit being planned for Kilombero. BELIZE BSI, essentially a cooperative with ~81% of the shares are owned by the Employee Trust [the rest are owned by Tate and Lyle Sugar (10%) and the Government (~9%)], borrowed about US$ 65 million in 2007 for an upgrade and Belcogen, its electrical export project. It did so on the basis that the crush would rise to 1.4 million tons a year and annual sugar production would exceed 125 000 tons. Electrical export was an obvious opportunity for a factory with 18 to 20% fibre cane and a special incinerator to dispose of surplus bagasse. Unfortunately, cane supplies have not increased and the debt financiers have called in their loans. A Honduran bank is offering to do a debt/equity swap but this is proving to be a political issue with the opposition claiming that it is ‘privatisation’. All this needs to be viewed in the light of the industry contributing 5% of the GDP and being the country’s largest single forex earner. JAMAICA We are hearing rumours that Complant, the Chinese contractor that bought the main part of SCJ just so that it could secure more lucrative contracts from the Government of Jamaica, is less sure that it wants to take over the operations at Frome, Monymusk and Bernard Lodge. Watch this space! THE ‘CANE TO JET’ PATHWAY It was late 2009 when we told you about the move by Californian company Amyris Biotechnologies to set up a research program for sugar-based aviation fuel at its biodiesel facility in Brazil. The objective was a test flight by 2012 with dreams of commercialisation by 2013. Last month it was announced that Boeing had joined the program and that a commercialisation study was about to start. Perhaps the program is on track. 
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