Sugar Technology
On-line News

September 2005

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August was a somewhat 'bitty' month for news although the EU regime change continued to reverberate around the world. Of course, at the end of the month, Hurricane Katrina became the main focus.


HURRICANE KATRINA : DAMAGE

The Domino refinery at Chalmette in New Orleans must have been more or less directly under the path of Katrina, the hurricane which struck the Gulf coast in late August. To date, little has been said by ASR, Florida Crystals or the Belleglade Co-op other than to appeal for knowledge as to the whereabouts of workers and to offer temporary accommodation for them.

Equally, if not more affected must be SPRI which occupies part of the USDA premises almost on the shores of Lake Pontchartrain. We hope that Mary An and her team are all safe and that the same applies to Gillian of the USDA itself.

The Holly refinery at Gramercy would have missed the worst of the hurricane, being some 50 km to the west of New Orleans. Holly quickly announced that it had its own power up and running and that it expected to start production when its workers were able to return. Chalmette and Gramercy should produce 5,500 t/d of refined sugar.

HURRICANE KATRINA : RESPONSE

In mid August the USDA announced a 3% increase in the overall sugar allotment to 8.35 million tons to cope with a much tighter supply situation. The increase was allocated to beet [~136 000 t] and, because there was no spare cane capacity, imports [~114 000 t].

At the end of the month it announced further changes to cope with the results of Katrina. Its overall observation was :

The catastrophic hurricane was the latest in a series of events that has severely tightened the sugar market and threatened the domestic production of sugar containing foods. The sugar market has progressively tightened across FY 2005 due to unexpected strong demand, reduced cane sugar production caused by previous hurricanes and expected weather-reduced September 2005 beet sugar production in the upper Midwest.

It has therefore increased the overall sugar allotment by a further 225 000 tons, ~122 000 going to beet and ~103 000 to refined sugar imports. It expects Mexico to be the principle beneficiary of this latest change.

WORLD PRICE

The world sugar price broke through the 10 /lb barrier in August and some traders are talking about 11 /lb before the end of the year. An ISO spokesman was quoted as saying that the international investment funds are now seeing sugar more as an energy commodity than a food one as oil prices continued to soar.

ETHANOL

The Chinese government has abandoned its plans for a fuel ethanol industry based on the cane sugar sector due to "irreversible sugar shortages in the country". Not so in Brazil where data published in August showed that there are 320 existing distilleries and another 33 currently being built.

EU TO DOUBLE ACP SUPPORT?

A German Member of the European Parliament, Michael Gahler, who is the first vice president of the 'ACP/EU Joint Parliamentary Assembly' has been implying that the EU will have to double its adaptation support to the ACP countries following the proposed changes to the EU sugar regime. However, it seems that he is only representing the view the Parliament, not of the Commission, so it may not follow that the support will change - assuming that the changes are agreed.

MEXICO

Mexico's internal dispute, reported here last month, seems to have been resolved with two sugar supply agreements running in parallel : "The new law will keep the collective supply contracts for cane growers, but it will also include the option for producers to use the new individual supply contract which the government had proposed". Sounds like a classic compromise.

AUSTRALIA

The Australian government has reported that one in eight farmers has left the cane sugar industry in the last five years and that the value of the industry fell by about US$ 150 million.

However, at a state level, Queensland is predicting a Au$20 million improvement in this year's crop. Mackay Sugar alone is forecasting a 400 000 t improvement in the crop so maybe the dry conditions are finally over?

STRIKE AT CHELSEA

As part of a wave of labour unrest in New Zealand, workers at the [one and only] Chelsea refinery started an indefinite strike in mid-August. As the company is owned by the Australians who might well prefer to sell their own refined sugar, it might not be too good an idea. We have seen several workforces come off worst in such disputes over the last few years.

IMPERIAL SELLS HOLLY

Southern Minnesota Beet Sugar Coop has purchased the Holly beet factories from Imperial for $50 million but Imperial has kept the Holly brand name. Holly's operations include the factories in Brawley and Mendota [both California] and a beet seed processor in Wyoming. The sale leaves Imperial free to focus on refining.

KENYA

The Kenyan government obviously liked the way that the privatisation of Mumias went : it has announced that it will soon privatise Nzoia as well. The problem is that Nzoia is not as well run as Mumias so will not attract the same amount of attention.

ZIMBABWE

Over the years we have tracked the collapse of the Cuban industry. Zimbabwe seems hell bent in following that same course. A senior manager from Triangle reported some interesting data last month : in 1999 private growers delivered 573 000 tons of cane to the factory, last year it was 349 tons! That accounted for most of the production fall which dropped from 315 000 tons of sugar to 250 000 tons in the same period.

BIOLOGICAL CONTROL FOR ELDANA?

South Africa is looking at the use of biological control for the eldana stalk borer, but only using naturally occurring local species : no chance of man's interference making things worse. The concept is to attract the borer's natural predators into the cane lands and simultaneously use co-located crops which are repugnant to the borer. Watch this space

BEET PULP TO METHANOL

A company has been set up in the US to commercialise a process that produces methanol from sugar beet pulp. It is a fermentation process with talk of enzymes and genetic modification and making methanol in only 2 hours [compared to perhaps 48 hours for conventional ethanol fermentation]. Unfortunately its business model seems to be based on the pulp being 'almost worthless' which seems to ignore the current pulp to methane process : feeding cattle.





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