Sugar Technology
On-line News

December 2013

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The Christmas doldrums, not much news-worthy material :


WORLD PRICE

Well what a month November was : the world price slumped all the way back to 17 /lb and was testing the territory below that as the month closed :

World Price

The consensus is that there will still be a surplus in 2013/14 but, equally, people are predicting a lot of closures if the price stays where it is : tens of mills may well close in Brazil alone.

TENDAHO

It seems that the saga of the tednaho factory is finally drawing to a close : the Ethiopian Sugar Corporation has announced that it will start production in January [although it also announced that it was only 85% complete in November so we are not sure whether to believe them]. The project started in 2009.

The data is certainly world class, if correct : this first phase uses only 11 000 ha of the 50 000 total on the scheme; the factory has a nominal rating of 26 000 tcd and is expected to produce 619 000 t/a of sugar plus 26 million litres of ethanol a year; it also has a 120 MW (!) power station.

COMESA

The Common Market for East and Southern Africa celebrates its 20th anniversary in 2014. Perhaps that thought has prompted Kenya to announce that it intends to ask for yet another extension of the exclusion of sugar from the common market in order to protect its domestic market. This is to give it more time to complete the privatisation of its remaining public sector sugar industry. Regular readers will recognise the theme : Kenya last asked for and was granted an extension back in 2011 for exactly the same reason.

DANGOTE

Dangote, Nigerians dominant sugar refiner, is claiming that it has invested NGN 12 billion [US$ 75 million] in its Savannah raw sugar estate to increase the annual capacity to 200 000 tons yet it only produces about 15 000 tons due to ‘issues with the community’.

EU AND SOUTH AFRICA

There is talk of the EU opening up its sugar market to South Africa after years of sanctions. However, it may be too late as South Africa has swung from being a net exporter to being a balanced market : ISO data shows that over 950 000 tons net was exported in 2005 but only 3 500 in 2012. South Africa is asking for an annual quota of 320 000 tons.

BAHRAIN

The ASC refinery has started hot commissioning with the first sugar coming off the centrifuges right at the end of the reporting period. It is now just a question of when the first commercial sugar is produced.

INDIAN SUBCONTINENT

Trouble is brewing between governments and sugar millers in both Pakistan and India, in both countries because of the enforced buying price of cane and the low selling price of sugar.

In Pakistan the problem is currently in the southern Sindh province where the provincial government has set the price of cane at Pak Rs 180 per maund [US$ 42/t]. Although there has not been any official announcement on either side it is reported that the mills have either stopped operating or are, at best, ‘going slow’.

In India, it is Uttar Pradesh which is the focus of attention where the millers have refused to start crushing, the UP Government has not declared its price for cane yet it issued a deadline for the millers to start crushing by November 20. It was ignored and the deadlock lasted until the end of the month.

WILMAR

Regular readers will know that Shree Ranuka seems to be in financial trouble and is trying to sell its Brazilian operation. The latest rumour is that Wilmar will take an interest in the company, giving it a stake in both India and Brazil.

QUEENSLAND SUGAR LTD

Trouble might be brewing at QSL, the industry owned sugar exporter, as it is revealed that it did a secret deal with Louis Dreyfus back in 2011 which gave Mackay Sugar the financial support it needed to bid for the Tulley factory. As we all know, that eventually went to the Chinese owned CofCo so the money was never drawn down.

BRAZIL

Some interesting data from a bankruptcy sale in Brazil : a local company called Clealco which owns two factories in SP State has bought the Campestre factory from its owners. The agreed sum is BRL 187 million [say $82 million] to be paid in instalments over five years but Campestre has debts of BRL 530 million. The good thing is that Clealco is proposing to spend another BRL 160 million at Campestre to double the throughput, after which its three factories will have a combined annual capacity of 12 million tons.