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A mixed bag - in terms of spread and quality of content - this month.
Although the price has stabilised in the 11 to 12 ¢/lb range it wasn’t helped by estimates from Cargill and F.O.Licht. Cargill predict a 3 million ton surplus next year. Licht are expecting the Indian crop to jump 20% to about 25 million tons.
TATE AND LYLE
T&+L must have a new PR company : it hit the news wires several times in October :
Brazil is expected to return to its target 25% ethanol ratio as production continues to climb. Total production is expected to reach a record 16 billion litres, of which perhaps 20% will be exported.
Another Indian sugar company has announced an export oriented project, this time in Karnataka south of Mumbai [Bombay]. Shree Renuka intends to build a 5 000 tcd ‘Brazilian model’ facility which will export sugar. Clearly the surplus electricity will be for local use and it is unclear whether the ethanol will be for domestic or export markets.
Coincidentally the state announced at almost the same time that its sugar farmers could sell their cane to anybody, even across the border to other states. It is unclear whether the state was encouraging the farmers to break their contracts though.
The furore in Louisiana over the State Agricultural Commissioner’s plans for a second state funded mill continues .. His plans now call for $135 million for the Bunkie facility and he is still looking for state funding despite political and commercial opposition. It also seems that Arkel, the Baton Rouge sugar engineering company, is no longer involved as a completely new and unknown name is being put forward as the company submitting a feasibility study.
In the meantime, there is no news of the first factory at Lacassine finally starting up although it was scheduled to do so at the end of October [most LA factories start in September because the season is so short as frosts come at the year end]. Nonetheless a deal has been announced whereby a Colombian investor will take control of the factory, owning 80%. The remaining 20% will be owned by local farmers. The problem is that the purchase is on the never-never : $100,000 per annum for 4 years and only then start paying off the $45 million of State bonds on the project. It is reported that the investor intends to build a co-located ethanol plant so maybe the thick syrup which Lacassine will produce will not have to be sent to Patout for processing after all.
The USDA has published its view of the current Australian crop : only 4.95 million tons as a result of the smut infection and the hurricane that hit northern Queensland.
In other news, Bundaberg has announced that it will not be proceeding with its plans for an ethanol plant at its Tablelands heavy syrup factory and Proserpine had announced a $30 million [Australian?] investment in a furfural plant. Proserpine has been talking to a group of South Africans – ex-Illovo employees – for some time about furfural technology.
NORTH AMERICAN BEET
It seems that nature has been generous this year with high beet yields but is threatening the start of the campaign with excessive rain in some places. American Crystal in the Red River valley is reporting an average yield of 25 st/acre [56 t/ha], over 30% more than the longer term average. In fact the cooperative has had to order an 8% plough-in of the crop as it just couldn’t process it all. [It is unclear if that is truly a plough-in or just a diversion to non-sugar use such as cattle silage.]
Further west, at Western Sugar there were reports that the yield was not as high as it would have been because of a shortage of rain to bring it maturity. Perversely, the cooperative then reported a delay in the campaign as heavy rains meant that it couldn’t access the fields.
Even further west but on a different note, there was a report of an ‘explosive device’ being discovered in the coal supply at Amalgamated’s Twin Falls factory. Strangely, there was no report of what type of device or how it got there.
KINYARA PRIVATISATION SAGA FINALLY ENDS
After much speculation over the last few months [and optimism in the Booker Tate camp] about its ability to actual pay for its shares, the Rai group formally purchased 51% of Kinyara on October 21 and has taken control of the estate. As regular readers will know, the privatisation has taken many years to complete.
Rai is described as Kenyan/Mauritian group with a base in forestry products. It has no previous experience of the sugar industry.
Christian Fookune [presumably from Mauritius] has taken over as GM from Booker Tate’s Jack Mclean and the company has confirmed that there will be no job losses : a brave statement in the light of the current manning levels. There will be a two month hand-over period so Jack should be home for Christmas.
AL KHALEEJ FIRE
We understand that the Al Khaleej refinery suffered a fire on one of its raw sugar belts at the end of the month but are not clear which. As it currently has 400 000 tons of physical raws in its giant store it must have had a lucky escape. In a press release just before the fire, the company announced that it was running at 40% below capacity.
The sugar industry in the Philippines is getting quite excited about the new bio-fuels legislation passed by the country’s Senate. It requires “all liquid fuels for motors and engines to contain locally sourced components” according to its sponsor. What is not being addressed is the issue of who will invest in ethanol plants. The Filipino industry suffers from a biased commercial arrangement where mill owners invest in factory improvements and cane farmers reap the majority of the benefit. Expect to see new models for the industry in the future.
TH has announced plans to spin off the aluminium division and, at the same time, sell 25% of its sugar division to black investors.
4 KILLED BY SUGAR LOAF MOULDS
Making sugar is dangerous : four workers were killed and another 15 injured in a freak accident at Eslamabad-e Gharb in Iran when a moulding machine malfunctioned. Sugar loaves are still popular in Arabia. They are made by [very noisy] continuous conveyor equipment but it is not clear what exactly went wrong in this instance.
SUGAR CANE CAULIFLOWER?
Coimbatore scientists have announced that they are working on Saccharum edule varieties which produce an edible flower head rather like a cauliflower. The original strains do not produce much sucrose in the cane but they would like to boost that to commercially viable levels so that both cane and flower head can be harvested.