Sugar Industry News : September 2015
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The world price continued its decline in August : at one point it was as low as 10.13 ¢/lb. It did recover a bit to close the month at 10.71. Many are blaming the steady decline of the Brazilian real which is plotted here with the world price :
If you look, though, it is the world price which is leading, the real following so is sugar dominating the country’s economy?
SUGAR BEET STILL BEING CONSIDERED FOR EIRE
The Irish politicians are still talking about a new Irish beet sugar industry, something which would be legally possible after the EU 2017 regime change. Whether it is economically and financially possible is another question and there does not seem to be agreement as to where it should be built, now who would put up the €400 million that would be required : watch this space!
INDIA LOOKS TO EXPORTS
The Indian Minister of Commerce has been quoted as saying that, faced with another large crop this coming year, the federal government is looking to export some of the surplus that has built up over the last three years. There is even talk of compulsory exports being imposed as there were so few takers for last season’s export subsidy.
MSM AWARDS CONTRACT FOR NEW REFINERY
MSM, one of the Malaysian sugar companies, has finally signed a contract for its long discussed refinery in Johor, just across the wet boarder that separates Singapore from Malaysia. This is the refinery that was going to be a joint venture with Jamal Al Ghurair and the same size as Al Kaleej until the jv dissolved almost a year ago. We are now told that it is a 500 000 t/a [unspecified] unit which will cost $130 million.
TPP SUGAR DIFFICULTIES
Last month we reported that the Australian industry was hopeful that the Trans-Pacific Partnership negotiations would bring it access to the US market. Australia was asking for 500,000 tons of annual allocation but the US offered just 152,000 tons – a mere 62,000 tons above the typical value – but that has been rejected.
Not surprisingly, across the Pacific, the US sugar lobby has swung into action to ensure that the Australians do not succeed and we all know what happened with the NAFTA sugar regime, an ongoing debacle.
JAMAICAN INDUSTRY STRUGGLES
The sugar industry in Jamaica is struggling with its extraordinarily high production costs and the imminent loss of its lucrative EU market. In the crop just finished, the whole island only produced 134 000 tons of sugar, 20 000 tons down on the production just one year before.
Golden Grove – Duckenfield as it used to be called – is in particularly bad shape but the industry in the east of the island always was marginal. The owners are demanding the right to sell their own sugar but that has not yet been granted so last month the company made all of its agricultural workers redundant, saying that it would contract out the work.
BARBADOS GAMBLES ON SPECIALITY SUGAR
Barbados is down to an annual production of 15 000 tons of sugar and the government seems to think that direct consumption sugar is the only solution to save the industry from total collapse. It has established a brand called ‘Plantation Reserve’ for exporting food grade raws, a brand which is reported to claim that it selects ‘only one cane in a hundred’ as suitable for processing. As it will be 15% of the island’s output, with the government wanting it to increase to 25 000 tons or 165% of current total production by 2020, it is difficult to understand how that works.
GUYANA’S NEW GOVERNMENT SUPPORTS SUGAR
Guyana’s new government – the first in 23 years – is vowing to keep the country’s sugar industry going and has announced a Commission of Inquiry into it. Private cane farmers – as distinct from Guysuco’s estates – have been singled out as exemplary at this early stage.
Copersucar, the Brazilian cooperative, lost its biggest milling group in May this year, it just didn’t tell anybody about it. That follows the departure of Aralco, a bankrupt company with four factories, in 2014. This latest departure is by Grupo Virgolino de Oliveira, another seriously troubled company with four factories. The company – which was the one to confirm its departure – says that Copersucar just could not support it when desperate for cash for bond payments. Copersucar still has about 40 factories allied to it.