Sugar Industry News : September 2017
Welcome to our news page where we try to bring you the latest news and comment 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 above.
WORLD PRICE
The graph never tells the truth. At one point in August the price plunged back down below 13 ¢/lb but good news from Brazil [see below] brought it back up to about 14 ¢/lb by month end :
Most commentators don't expect much improvement as we move into an annual surplus.
ISO GIVES A BEARISH FORECAST
Last month, the International Sugar Organization [ISO] cut its estimate of the deficit for the current year from 6.5 million tons to 3.86 million while forecasting a surplus for 2017/18 of 4.63 million, up from its previous estimate of about 3 million tons. Over half the 8 million ton swing is a result of recovery in India and the EU is expected to contribute another 2.8 million.
BRITISH SUGAR PREDICTS EXTENDED CAMPAIGN
British Sugar is expecting to slice beet from between 106 and 107 000 hectares in the campaign that is about to start. That compares with 79 000 ha last campaign, a 35% increase in land area. The talk is that the campaign will run until late February or even early March 2018.
GHANA STARTS AGAIN WITH KOMENDA
It has emerged that the much acclaimed Komenda factory [really the second Komenda] has not crushed any cane. The government of Ghana has therefore stepped in to appoint consultants to look for viable cane land and identify suitable varieties. As the first Komenda project failed because of the poor sandy soils and associated nematode issues, they will have a hard time undertaking that assignment.
DANGOTE ALSO INVESTS IN NIGER STATE
We reported that Nigeria's Dangote Sugar was building a sugar estate in Nasarawa state in July. In August it announced that it was also investing in Niger state which is immediately west of Abuja, the federal capital. This time the budget is claimed to be US$ 450 million and the land area is 16 000 ha.
KENYA DROUGHT IMPACT BECOMING CLEARER
The Kenyan industry is reporting a 34% reduction in production in the first five months of 2017 leading to a predicted 1.9 million ton import requirement. The government removed the tariff on non-COMESA imports some months ago and is issuing licences for that purpose.
POLITICS COMES TO MUMIAS
Kenya's President and the VP visited Mumias in early August, not really a surprise given the election date of August 8. Nor was it a surprise that they came with a cheque for KSH 500 million [about US$ 5 million] specifically for the company to pay farmers back-dues. What was a surprise was that the VP agreed to scrap the deductions made by the company from cane payments to recover payments in advance to allow the farmers to buy fertiliser and other essentials. How will that help the company recover?
TONGAAT TO CONSTRUCT REFINERY AT XINAVANE
Last month South Africa's Tongaat Hulett announced that is to construct a small white end at its Xinavane factory which is some 100 km north of Maputo in southern Moçambique. The 90 000 t/a refinery will produce bottlers' grade sugar and the company is intending to gain ISO 22000 certification for the facility.
INDIA INTRODUCES STOCK LIMITS
In a move that underlines how tight the supply situation is in India, the federal government announced a stock limit at the end of August. They are allowed to hold 21% of their sugar in September but no more than 8% in October. This year, Diwali is early [in mid-October] and traditionally it is a peak consumption period. Let's hope that this year's heavy monsoon doesn't delay the start of crop.
MERINGA STATION UNDER THREAT
Australia's Meringa cane breeding station, 15 km south of Cairns near Mulgrave factory in northern Queensland, is under threat from the establishment of a proposed industrial development area. If nothing else the threat does seem to have united the industry for a change.
FIJI SUGAR CLAIMS A GOOD CROP
FSC reported 650 000 tc to date back in August with a somewhat improved yield at 9.55 tcts compared to last crop's 10 tcts. The company has a budget of 2 million tons for the crop which is expected to finish in November.
BRAZIL TAXES ETHANOL IMPORTS
Towards the end of August the Brazilian government announced a 20% tariff on any ethanol imported above a 600 000 m³ tax-free quota. That should help support domestic ethanol production and nudge the crystal sugar / ethanol balance in favour of the latter. The world price responded positively.