October 2005 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. Last month's news was dominated by the reverberations from the proposed EU sugar regime reform and Hurricane Katrina hitting eastern Louisiana …. This month's news is dominated by the reverberations from the proposed EU sugar regime reform and Hurricane Rita hitting western Louisiana …. and the world price went through 11 ¢/lb. EU SUGAR REGIME There were two reasons for the EU regime change to be so much in the news : the sudden realisation that the change would force a lot of sugar onto the market and an ACP ministers meeting in Kenya. Estimates of the amount of extra EU sugar coming on to the market this year vary considerably but it seems plain that the commercial sector is assuming that the proposed changes will happen very quickly so the sugar will move in the 2005/6 year. The original WTO plaintiffs [Brazil, Australia and Thailand] are now saying that this result of their complaint is unfair and are threatening to go back to the WTO. The commentary [there was no real 'news'] coming out of the ACP meeting was very subjective with both the ACP countries and third parties saying that the reforms were unfair and 'demanding' that the countries involved were compensated. As the third parties were organisations such as Oxfam and WWF, long critics of the regime, it is difficult to find their comments credible. As to demanding that what was essentially aid, freely given, continue …. HURRICANE RITA Hurricane Rita, when it finally came ashore, passed almost overhead Lake Charles in western Louisiana and as the main force of a counter-clockwise spinning northern hurricane is to the right of the eye the effect was also felt in the Mississippi parishes where most of the cane grows. It is too soon to fully assess the crop damage but it seems unlikely that the new mill at Lacassine will have much cane, if any, to crush and the estimates to the east talk of as much as 75% damage although that is probably too high a figure. On a lighter note and following last month's report on Hurricane Katrina, Domino [ASR] report that they have located 95% of its Chalmette refinery workers and Imperial had restarted its Gramercy refinery quite early in September, albeit subject to the availability of fuel and transport. Before Rita caused more tidal surges the floods had receded from Chalmette and the company was trying to assess the damage. It is not clear when Domino might be able to start production again. Following on from last month's news about the reactions to Katrina from the USDA, it has now been confirmed that Mexico is to benefit to the extent of an additional 268,000 tons of special import quota [compared to its otherwise 8,000 tons]. WORLD PRICE Last month we reported that "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." Little did we think that we would be reporting that it went through 11 ¢/lb shortly after we went to press. The price surge seems to be fuelled [if you will excuse the pun] by the continuing high oil price and the potential for it to stay there as the hurricanes force the US to close its oil refineries. Although the price dipped back below 11 ¢/lb at the end of the month it bounced back immediately and looks set to stay above, possibly even hitting 12 ¢/lb in October. USA In other news from the USA, the long expected closure [or rather 'non-opening'] of the Atlantic factory was finally announced during September. It is not many months since the US Sugar Corporation announced the closure of its Bryant factory at the end of the 2006/7 crop but ever since that had been planned it was understood that Florida Crystal would have to close either Osceola or Atlantic. As Atlantic is only majority owned [rather than owned outright as Osceola is] it must have taken a lot of negotiation behind the scenes. Presumably the cane will be split between Okeelanta and Osceola. Talking of Osceola, a group of manual cane cutters [the harvest was fully automated in the early 1990's!] are currently trying to claim $5 million compensation because they think that they were underpaid all those years ago. INDIA The USDA routine report for India is predicting a cane crop equivalent to 18.4 million tons of sugar now that the drought of the previous few years appears to be over. Ironically, part of the report describes water logging damage to the cane crop in some areas of Maharashtra and Gujarat states. In his report, the Agricultural Attaché notes that he expects more cane to be switched from traditional sweeteners [gur or jaggery] to regular sugar production. MEXICO Last month we reported the compromise that was reported to settle the dispute around President Fox's attempts to reform the sugar industry. This month we have to report strikes at many of the country's sugar factories - both private and public sector - in protest at the reforms. The strikes were not expected to last long. CUBA It looks as if more factory closures are on the cards in Cuba. In September the Sugar Ministry was reported as planning to replace some of the remaining mills with food processing plants. The plan apparently encompasses the establishment of over 100 factories to process soy beans and corn and to produce pastas, chocolate and other sweets. TSB INVESTS IN SWAZILAND Actis, a Mauritian investor company has sold its 25.85% stake in the Royal Swaziland Sugar Corporation to TSB, the third and smallest of the South African companies. It is a logical step for TSB which owns two factories, both close to the northern border of Swaziland. RSSC owns two estates : Mhlume and Simunye the third one at Big Bend being owned by Illovo]. PHILIPPINES It seems that cane farmers in the Philippines are switching over to bananas for processing to chips because the financial yield is better [for now]. Sugar Regulatory Administration estimates that the 2005/6 sugar crop will only produce 2 million tons but that at least takes the country away from having to dump on the world market. The industry will also benefit from the increased US allocation following Hurricane Katrina. KINYARA Four foreign companies have bid for the Kinyara factory in Uganda, in addition to its local rival Kakira, owned by the Madhivani Group. Booker Tate [presumably supported by its parent TSB of South Africa] is one of the four as expected. A second un-named South African [Illovo? Tongaat?] is another. The Aga Khan Group and an un-named Libyan company are the other two. IRAN Iran is certainly trying hard to become independent of sugar imports to satisfy its almost 1.9 million ton demand. In the five years from 2000 cane production has increased from 2.37 million tons to 6.2 million but that was down perhaps a million tons because of an unexpected frost in the K?r?n valley. NEW START-UPS A report on the wires last month reported that the state government had entered into a US $100 million contract to build a sugar factory in Kogi, northern Nigeria. The factory is reported to be built by Chaswill Process Technical from South Africa. The problems are that it is extremely unlikely that the federal government, let alone a state one, could put up $100 million and the South African company is not known in the sugar industry [by its own admission "Clients include a selection of South Africa's top companies in the food, beverage (fruit juice, wine and beer), dairy and chemical industries."]. THE PERILS IN MAKING SUGAR We are note sure if this a real peril or an entry in the 'best excuse to give your boss' competition but an Illovo spokesman reported last month that "thousands of hectares of sugarcane" had been destroyed by buffalo escaping from a game park in southern Malawi. Buffalo are notoriously dangerous animals so he went on to note that some workers too frightened to enter the fields. 
|
