Sugar Technology
On-line News

October 2010

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Very much commercial this month :


WORLD PRICE

The world price – and India’s total inability to predict the size of the crop in the year just started – has again dominated the news. The world price rose by 25% in September but closed down from the peak at the very end of the month at about 24 /lb :

World Price

It is unlikely to stay off the peak however as forecasters struggling with the Indian figures predict only a small surplus this year, not good following such a long period of deficit. The Indian government is forecasting the crop to give 22 million tons of sugar – still up 4 million tons on the year just finished – but the industry is saying 25 million and some traders are talking of another year at 28 million. As India has a domestic demand of 23 million that means anything from a 1 million shortfall to a 5 million surplus. The country is presumably low on strategic stocks following the last two years of poor harvest [some say as little as 2 months] so a surplus does not necessarily mean a large export.

To all of that you have to add the latest news that UP and Maharashtra have both experienced unseasonal heavy rain so the crop in those provinces will be delayed.

Meanwhile, the President of Cosan, the world’s largest sugar miller now controlled by Shell Oil, has reportedly stated that the current price – he was speaking when it was around 25 /lb – does not adequately reflect the shortage of sugar and that Cosan expect prices to continue to rise through 2011. Brazil’s crop is expected to be down in the 2010/11 year due to drought.

TATE AND LYLE DEAL FINALISED

The sale of Tate and Lyle’s European sugar division to ASR was formalised on September 30, essentially ending the group’s involvement in sugar, its very foundations. We understand that the legal name is now T&L Sugars Ltd [a company only established in July this year] but that it has a [presumably exclusive] license to sell its sugar as the “Tate and Lyle” brand.

ASR, controlled by the Fanjul family’s Florida Crystals Corporation and with the remaining shares owned by the Sugar Cane Growers Cooperative of Florida, now owns 5 cane factories and 10 refineries globally. The annual output of the group is 6 million tons of refined sugar.

GERMANY

Although 500 000 tons down from last year’s high, Germany is still forecasting 3.65 million tons of sugar production for the campaign just started, 1 million more than quota. Presumably the price for selling beets for bio-ethanol is [almost?] as attractive as selling for sugar production – or do the farmers expect the EU to export beyond its WTO allowance again because selling into a high market is not dumping?

SYRIA

The second refinery in Syria, owned by Tarif Akhras and also situated near Homs like the Cargill refinery, has started production according to its owner. It is unclear whether ‘starting’ means commercial production or just the start of commissioning. The capacity is reported to be 600 000 t/a with expansion capability to 1 million tons.

SUDANESE BUYING SPREE

Following last month’s news item about another new sugar project in the Sudan, in September the government took a trade delegation to Brazil where Kenana signed deals reported to be worth $300 million to double the size of its ethanol plant.

MUMIAS

Mumias Sugar, the only successful factory in Kenya, has announced a US$65 million ethanol project, to be operational by the end of 2011. The capacity is expressed as 22 million litres per annum but there is no way of telling whether it will be a crop only operation or a full year one.

PHILIPPINES

A Chinese company from Shanghai region is reported to be wanting to establish a 300 000 t/a refined sugar facility in the Philippines. The problem is that is only prepared to invest some US$ 23 million and wants to produce the sugar on only 6 000 ha of land. The government is talking of pairing them up with either Tarlac or Sweet Crystal, both on Luzon Island north of Manila.

US BEET CHAOS

The court finding against transgenic beet, reported here last month, is likely to lead to major problems next year in the USA because there will not be enough non-transgenic seed. The environmental group behind the fight is claiming that using ‘Roundup Ready’ seed takes away the rights of say ‘organic’ farmers seems to ignore two points however : the transgenic seed has been grown for two years now and beets don’t seed before being harvested : they are biennial plants.

CENTRAL AMERICAN STORMS

Mexico’s biggest sugar growing estate, Veracruz, was hit by hurricane Karl during September. That event plus other heavy rains have flooded an estimated 60 000 ha of sugar cane in the south of the country but it is hoping to avoid having to import for the third year running. It is too soon to accurately assess the damage however.

Guatemala and Honduras have also cut their cane forecasts following severe storms last month.





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