Sugar Technology
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September 2013

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Picking up again after the summer doldrums :


The world price continued to bounce around the bottom in August, breaking through 17 /lb at one point in mid month but settling back down at around 16.5 by the time the month had ended. There don’t seem to be any clear pointers as to what happens next.


Nordic, which operates around the Baltic, is predicting a good harvest despite the late sowing caused by this year’s extended winter. It reports that growing conditions have been very favourable once growth started and is expecting to have sugar in excess of its quota.


India has announced a US$ 125 million line of credit [INR 6.7 billion in May this year but INR 8.1 billion now, showing how far the rupee has slipped in the last quarter] for a new sugar estate in the Sudan’s White Nile state. One cannot resist comparing that with the $ 1.1 billion cost of the [in]famous White Nile project itself.


The Federal Government in Nigeria is talking about becoming an exporter of refined sugar by 2016, praising the three refiners for their commitment to the ‘Backward Integration Policy’ which is supposed to force the refiners to invest in sugarcane estates and hence turn the country from a producer of about 30 000 t/a [and importer of > 1 million t/a] to net exporter by 2016.


Yet another factory has been announced for Kenya, this time in South Nyanza and therefore competition for Sony. The sponsor is an Indian company called ‘Purandare India Private’ but that doesn’t seem to be a well known name in the Indian industry. The plan is apparently for a 3500 tcd factory.


Zambia Sugar produced 404 000 tons from 3.25 million tons of crush in the last crop, the investment of a few years ago now fully paying back. The company is now hinting of a change of direction, suggesting that it can provide ‘up to’ 10% of the country’s fossil fuel demand by installing a molasses to ethanol plant. One suspects that that is really only 10% of the ethanol demand.


Zimbabwe has introduced a 5% ethanol mandate for petrol [gasoline] which has reduced pump prices from $1.50 to $1.10, a welcome move for drivers. Of course it will also be welcomed by Chisumbanje based Green Fuel which just happens to be owned by the President.


No, we don’t really understand it but it seems to be a potential common market for Pacific Ring countries so it ranges from Chile in the south east up through the USA and Canada and down the other side through Japan and Korea all the way to New Zealand in the south west.

As is usual with such potential markets, sugar is one of the major stumbling blocks with, for instance, the USA not wanting to have concede access to Australian sugar. There was yet another round of talks [the 19th apparently] in Brunei last month so watch this space.


People are talking up this year’s and next year’s Australian crop, saying that the weather is [finally] looking better than in recent years. Credit is also being given to Wilmar which is said to have invested heavily in its mills since taking over CSR/Sucrogen in 2010.

Meanwhile, ‘Sugar Research Australia’ has been officially launched. This new body is being funded by an industry wide levy but it still seems to come under the aegis of the government having been appointed by the Minister of Agriculture, Fisheries and Forestry as the sugarcane industry’s service body. It seems to have been formed out of the rump of BSES but where does that leave SRI?


The Philippines’ government is also moving towards a more robust ethanol programme. That country’s Sugar Regulatory Administrator has announced that next year’s allocations will allow producers to convert sugar from a world market designation to ethanol feedstock.


Last month, the US Federal Government started buying from sugar producers to on-sell to ethanol producers in order to avoid defaults on loans by the sugar producers. However, it seems there is a glut in the corn market at the moment so the ethanol companies are not really interested and the buying price doesn’t seem to interest the sugar companies as less than 100 000 short tons was tendered.


The Guatemalan government has announced that it is willing to help Barbados restructure what is left of its sugar industry. What is less clear is whether any of the Guatemalan sugar companies will be prepared to help. It is certainly very doubtful that they will be prepared to invest.


One of Guyana’s local newspapers is reporting that South Africa’s Bosch Projects has recently completed US$ 30 million of remedial works at Skeldon, just 5 years after the $ 200 million project eventually opened. Not a good advert for the Chinese contractor.


Some interesting data has been released by Unica, the Brazilian Sugarcane Industry Association. The industry has gone from one where tens of mills were opening every year in the last decade to one where the opposite is true : about 40 mills have closed so far this decade and another 60 are expected to close by the middle of the decade as a result of unmanageable debts. Perhaps the most telling statistic though was the $4 billion which had to be spent in 2012 [one year!] in ploughing out and replanting when the industry finally realised that you cannot neglect the basics, particularly not in sugarcane agriculture.


A Vancouver company, S2G Biocom, is talking of establishing a 100 000 t/a beet to glycol factory in southern Alberta. It already has a similar capacity corn glucose to glycol factory operating in China. The technology involves a double hydrogen treatment : firstly hydrogenation and then hydrogenolysis.

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