Sugar Industry News : October 2014
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Well, that was an exciting month, albeit a depressing one. At first glance the world price looks flat, ending the month where it began but when you look at the detail you see that it first of plunged quickly and then recovered again even more quickly :
The price bottomed out at 13.5 ¢/lb, a value not seen for many years. As the month ended and October 2014 expired rumours were circulating that some people had made some major purchases in those few days. Watch this space!
UK BEET CAMPAIGN FORECAST
British Sugar started this year’s campaign in the middle of September. The company is forecasting that the mild winter and early spring at the start of 2014 should result in a good crop. The estimate stands at 7.5 million tons of beets.
The company is asking its growers to scale back next year’s sowing by as much as 20% because of the high yield this year and its high stock levels.
NEW PROJECT IN EGYPT
Last month, Egypt’s State Information Service announced that ‘a UAE company’ would be setting up a $550 million sugar project in the province of Minya which is about 250 km south of Cairo. It is presumably a cane based project and is reported to have a design capacity equivalent to 400 000 t/a of sugar. Is this another venture for Jamal Al Ghurair?
ANOTHER GHANAIAN SUGAR PROJECT
Another sugar project, this time in Eastern Ghana, has been announced although it does seem to have more of an ethanol focus. The target district is Kpong on the River Volta where there is a large hydroelectric dam with a small [250 ha] experimental farm owned by the Volta River Authority.
Yet another debacle in Ethiopia involving an Indian contractor, this time over a maintenance contract at Metehara. The contractor, ‘Three Star’, is no longer in the country, Metehara is undertaking its own maintenance [why wasn’t it doing that anyway?] and performance bonds have been called in.
UGANDA SUGAR LAW
The government of Uganda is proposing to introduce new laws to regulate the sugar industry, replacing a 75 year old law from the colonial period. Part of the thinking is to avoid future conflicts with other members of COMESA like the recently settled dispute with Kenya over re-badging of imported sugar.
UGANDA KINYARA ETHANOL
We hear that Kinyara Sugar Works, now controlled by the Rai group, is finally proceeding with its long discussed ethanol project. By all accounts it is already in discussions with a potential contractor.
MUMIAS PROFIT WARNING
Perhaps a misleading headline : Mumias Sugar in Western Kenya is warning that losses in the current year will be worse than the $25 million loss recorded last year. The company is blaming cheap imports and a poor harvest but as it has just fired two managers for ‘questionable sugar sale and importation transactions’ one has to wonder.
BUTALI LICENCE REVOKED
At the very end of September the Kenyan Court of Appeal revoked the licence of Butali Sugar Mills, a project just 20 km north east of Mumias. It is not clear whether the factory yet exists or is just a dream but the sponsors are unlikely to stop fighting whatever happens.
ANGOLA ABOUT TO START PRODUCTION AGAIN
Angola used to have a sugar industry – before the civil war. Now, the Bioenergy Company of Angola, public-private partnership part owned by Brazil’s Odebrecht, seems to be ready to start crushing for the first time. It is saying that it will have produced 18 000 tons of sugar by the end of this year. The factory is in Casuco to the east of Luanda where the agricultural conditions have long been questioned so it will be interesting to see how much cane is produced next year, the first full crop.
STARAFRICA STARTS RE-COMMISSIONING
StarAfrica, originally Rhodesia Sugar Refineries, finally started re-commissioning its Harare refinery last month following a long drawn-out $7 million refurbishment. The data released, though, is horrific : the yield before the refurbishment was 87% and is only expected to be 96% after the refurbishment even though Zimbabwe makes a good quality raw sugar.
UTTAR PRADESH SITUATION
India’s industry is perhaps exemplified by that in UP where the financial situation seems to be going from bad to worse as millers continue to loose on every ton produced and farmers are still owed 40 to 50 billion rupees [$650 to 820 million] for their cane. It is unclear whether the millers will start the crop when the time comes – regular readers will know that they have been threatening not to – and that assumes that they are still financially viable.
THAI CROP FORECAST
The Thai industry is warning of difficult times – and not just because of the low world price. It is reporting that the central and north eastern regions are experiencing a ‘severe drought’ due to climate change. The industry has been sitting on its stocks for some time, refusing to sell at the current price but at some point it will have to sell.
AUSTRALIAN CROP FORECAST
The Australian Sugar Milling Council issued a crop estimate last month, predicting the largest crop since 2006 at 32 million tons. It noted that generally field conditions had been ideal with factories reporting performances close to their maximum capacity.
Cuba is talking up its sugar industry, saying that there will be investment across the board but without saying how much investment. A quick check in the new ISO Sugar Year Book [just published and now on a tel quel basis] shows that perhaps the island is turning the corner in terms of sugar production : after several years at around 1.1 to 1.2 million tons, 2012 was >1.4 million and 2013 was >1.5 million.
BRAZIL CROP FORECAST
Concerns about the Brazilian crop are increasing with reports that the crush in September was declining rather drastically through the month. Admittedly some of the reduction was caused by unseasonal rains but the main concern is that the cane is just not there to harvest following the poor growing conditions this year.
PRACTICAL BAGASSE TORREFACTION
Following our article in the previous news about practical bagasse gasification in Florida, a company called NFR BioEnergy has announced that it is setting up a network of bagasse torrefaction plants in Louisiana. It has begun the development of the first one at a site next to the Cora Texas factory.
Torrefaction is a mild pyrolysis so a gaseous fraction is produced together with a solid fraction. Presumably the gas will be then fired in the factory boiler(s) while the char is converted to a solid fuel. The company, rather grandly, talks of selling the fuel as pellets to ‘the global energy market’.