Sugar Technology
On-line News

November 2010

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Quite an interesting month :


WORLD PRICE

What can we say? The world price has bounced right back to the 30 /lb level seen at the start of the year, having slumped to half that value in between times :

World Price

It is showing every sign of a scale change to the y axis being required when we bring you the news next month.

The reasons for this rapid rise include an expected shortfall in Brazil [the USDA is forecasting a 3.2% decline which might not sound a lot but that is over 600 000 tons and more than most countries make in total], drought in South Africa [see below] and, as ever, India where the crop is starting a month late and may no longer equal the forecast levels. Another part of the problem is the low level of global inventories so countries like India may well re-build their stocks rather than sell surplus.

FRANCE

Last month we reported a fall in the annual beet forecast from Germany, this month France has announced an 800 000 ton increase in its estimate from the previous month. Both countries are reporting a substantial fall in sucrose content [around 16% instead of a typical 18%].

ALGERIA

Cevital, the owner of the 5000 t/d Bejaia refinery which is also arguably the largest in the world [see item on Al Kaleej] is talking of increasing capacity by 25% next year.

SUDAN AGAIN

Now Iran is jumping on the bandwagon, announcing that it will invest in an agro-industrial complex in the Sudan, growing wheat and sugar. No details of size or of investment have been released. Interestingly Iran is offering to train the Sudanese.

NIGERIA

Lagos Flour Mills have confirmed that its long awaited refinery is going ahead and that, in part, they will also be investing in sugar cane agriculture in Nigeria to provide some of the feedstock. They are still on the tiny plot of land that has been mentioned here in the past so there must be some challenges ahead for the design team.

UGANDA

The Ugandan government has indicated that it is more or less ready to sell its remaining 49% stake in Kinyara although it did refer to the current private sector majority shareholder as just the manager of the company.

KENYA

The privatisation of the remaining five factories seems to be staggering on with Cabinet approval gained last month [only four or so months after the supposed completion of the sale. Meanwhile the farmers at Nzoia are demanding 80% of the shares …

SOUTH AFRICA

South Africa is in the grip of another drought and as much of the cane is rain-fed the forecast issued by SASA for the 2010/11 crop is steadily falling. Cane is now forecast at only 16.43 million tons and sugar at 1.96 million tons raw value. Production has not been below 2 million tons for well over a decade but is it just the drought? Graphing shows a much worse long term trend :

South Africa

AL KHALEEJ

The Al Khaleej refinery in Dubai, one of the largest if not the largest in the world, is planning to increase its daily capacity from 5 000 to 7 000 t/d.

EU AND PAKISTAN

It is reported that the EU will again allow Pakistan to export ethanol to the EU on a duty-free basis. After a period of duty-free exports earlier in the decade, the EU introduced a 30% duty in 2005. The removal of that duty is perhaps a reflection of the shortage of ethanol required for the EU to reach its environmental commitments.

MITR PHOL BUYS INTO MARYBOROUGH

Regular readers will have watched the development of Maryborough over the last two years, aware that Guinness Peat were funding some of the expansion. GP has now sold its nearly 20% stake in Maryborough to Mitr Phol, Thailand’s largest sugar producer. Australia’s sugar industry is rapidly becoming foreign owned, the CSR sugar division having been sold to Malaysia’s Wilmar group only three months ago and Bundaberg already being owned by Belgium’s Lippens family.

FLORIDA

How the mighty have fallen! In June 2008 Florida announced that it was buying all 180 000 acres of US Sugar’s land plus the factory for $1.7 billion. Since then the deal has been regularly downsized and appeared to be settling at about half a billion for 70 000 acres. Last month, the state finally completed the purchase but for only 27,000 acres and for only $197 million. Most, if not all, of the land is citrus land, not sugar land.

TRANSGENIC BEET

The USDA is currently waging a war of words against the ban on transgenic beets imposed by a Californian judge two months ago. It has estimated that there will be 1.6 million tons of beet less produced next year as a result of the ruling, implying a major shortage of sugar for the country [or a bonanza for Mexico]. That was then used to justify short-term permits with conditions ‘to prevent any potential plant pest risks’ while the necessary studies are completed.

GUYANA

The Guysuco workers continue to go down the path of commercial suicide : they declared an indefinite strike in mid October although it was theoretically changed to a one day one. In practice, many workers stayed away for a long time and some were not even back at work at the time of writing.

BRAZIL

A Brazilian petrochemical company, Braskem, has announced plans for a 30 000 t/a ethanol based polypropylene plant. Its ultimate goal, however, is to produce polypropylene direct from sucrose using either fermentation or enzyme technology. For that purpose it has a research alliance with Denmark’s Novozymes.





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