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The world price is again the key item : which way is it going?
No sooner had we published our concern last month that the world price was plummeting than it started to recover – but only until the middle of the month when it plunged down again. Finally, as the month ended it seemed to be recovering again :
Of course, it is said that traders make money on both up and down movements.
BRAZIL TO INCREASE GASOLINE TO E25?
There has been a suggestion that Brazil will mandate an increase in domestic ethanol from 20 to 25% of the gasoline equivalent consumption. The thinking is that this will reduce the country’s sugar exports and support a higher world price and the President “has pledged to consider the issue”. However, we are in the run-up to a presidential election so he probably pledges to consider anything put before him at the moment so don’t hold your breath.
Cuba has finally been able to report an increase in production : 2006 yielded 1.5 million tons of sugar compared to less than 1.2 million tons last year. It has also reported a 25% increase in planting but it is not clear whether it means 25% more of plant cane [i.e. a ~5% increase in crop] or a 25% increase in crop.
The Californian beet crop is reported to be 1.5 million tons, 10% down on 2005. Ironic really when the state is abuzz with ideas to increase the crop substantially to produce ethanol for gasoline blending.
India’s 2007 crop is forecast to be 23 or 24 million tons [double the drought hit crop two years ago] with this year’s looking like 19.5 million tons. It is likely that the government will soon lift its export ban, opening the way for several million tons of mill white sugar to be exported.
The Fijian government has announced a new strategic plan for its sugar industry aimed at increasing cane land area by 10% but, more importantly, reducing the cost of production by over 40%. However the plan is estimated to cost $350 million and there is no mention of where that money will come from. The current cost of production is reported as $35 per ton which is presumably the cost of the cane?
SKELDON 2 RUNS LATE
The completion of the new Skeldon factory in Guyana has been put back to February 2008 even though the Chinese contractor is working 24 hours a day. As the contract was signed in June 2004, that makes a 44 month programme. Site works started in September 2005.
NATURAL PROTECTION AGAINST BEET ROOT MAGGOT
Recent research has just been published in the USA suggesting that a fungal soil inoculum might protect young beets from the root maggot. The maggot is a serious pest in North America where estimates suggest that up to 40% of the crop would be lost without the application of chemical controls. A natural alternative would allow the reduction [elimination?] of those.
BOOKER TATE BACK AT BACITA
We reported the privatisation of Bacita back in February, mentioning an un-named South African partner. We now know that it is Booker Tate/TSB. The company, as Booker Agribusiness, was involved with setting up Bacita over 30 years ago. Its biggest battle will be irrigation as the estate is on the Niger but below the Kainji dam which is a hydro-electric project and lets water flow when electricity demand dictates, not when irrigation requires it.
South African cane growers are warning that the current crop may be less than expected due to ‘exceptionally dry weather’. It is not clear whether that is in the rain fed lands of Natal or an issue with water flow in the Komaati river which irrigates the lowveldt lands to the north. The current forecast is for 2.45 million tons of sugar from 21.35 million tons of cane.
NEW SOUTH WALES
NSW is reporting about 800 hours of lost time due to rain and predicting an extension of crop and a drop in production. The brotherhood north of the border in Queensland must be very jealous.
The Ugandan government has announced its intention to mandate E20 for its gasoline on the basis of reducing forex requirements for oil products’ imports. The country only produces about 200,000 tons of sugar [just about matching current demand] so there is only about 80,000 tons of molasses available and one estimate puts the vehicle fuel consumption at 70 million litres a month ….. the maths don’t add up.
GREEN CANE COMES CLOSER FOR FLORIDA
It looks as if the pressure is on for green cane harvesting in Florida with a study due to take place during the crop which is about to start. That is despite a special permitting arrangement and very few complaints from local residents.
LINK BETWEEN SOFT DRINKS AND HYPERACTIVITY
A Norwegian study has confirmed a link between soft drinks and hyperactivity in teenage boys in that country but why should that create headlines such as “Link proven between sugar consumption and hyperactivity”? [There is no mention of an attempt to differentiate between ordinary and ‘diet’ versions of the drinks.] The comments were even more confusing in that the conclusion drawn by one commentator was that HFCS was the culprit.
CHINA LIMITS SACCHARINE PRODUCTION
China, the world’s largest producer of saccharine, is going to continue to cut its production of the sweetener in order to protect its sugar industry. It only costs $5 in China to produce saccharine equivalent in sweetness to a ton of sugar. Production fell from nearly 25 000 tons in 2004 to 19 300 tons in 2005 and now only 12 000 tons is planned for 2006.
NEW NATURAL SWEETENER
More competition for sugar? One UK supermarket chain is starting to sell “Agave Nectar”, a 76% fructose syrup made from the ‘Blue Weber’ agave that is used to make tequila. As there was a shortage of the drink a few years ago due to a lack of agave plants, one suspects that we don’t have too much to worry about in the sugar industry.
OUT OF THE STRONG CAME FORTH SWEETNESS
The famous logo and tin of Lyle’s Golden Syrup has been entered in the Guinness Book of Records as the UK’s oldest logo. It dates from 1883 and is virtually unchanged : only the lion's genitals have been made less prominent for the sake of the modern housewife.