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quite a lot to get through this month :
Last month’s news saw the world price plunging down below 21 ¢/lb and that continued through May which closed at more or less 19 ¢/lb, the lowest price since Q3 2010 :
The question is whether we will now see a re-bound or not. The weather reports from Brazil and India [see below] suggest that we will.
Macquarie Group, a banking and investment organisation, has brought Wilmar’s 42.5% ownership of London’s Czarnikow. Wilmar inherited the shareholding when it purchased Sucrogen in Australia last year. Czarnikow’s shareholder profile is therefore now 42.5% banking, 42.5% sugar production [ABF, owners of ABF Sugar aka British Sugar] and 15% employees.
Jonathan, who left Cargill last November and has presumably been on ‘gardening leave’ ever since has joined a Singapore based trading company called RCMA Commodities in order to set up a sugar division for it. Good luck Jonathan [although we are sure you will make your own 'luck']!
As the current crop comes to an end in this, the most productive of India’s sugar growing states, Maharashtra is predicting a 15% downturn in next year’s crop compared to this. This year’s production seems to be about 8.9 million tons of the country’s 26 million tons.
Deep River Beau Champ Ltd and Flacq United Estates Ltd [Beau Champ and Fuel to you and me] have announced that they are merging to form what should be the largest of the millers on the island. What is not clear is where Ciel Agro-Industry, the owner of Beau Champ, lies in all this as Ciel also part-owns and manages TPC in Tanzania.
It is always interesting to get an insight into what Mitr Phol is thinking and we had one of those opportunities last month with Khun Isara commenting on the way forward for this, the largest and most progressive of Thailand’s sugar groups. It is clear that the group has gone cold on Cambodia and, more importantly, Myanmar/Burma. What was also interesting was that China was not even mentioned in the reports even though the group has a lot of interests in that country.
Is Fiji going backward again? The Permanent Secretary for Sugar was quoted last month as saying that Fiji has a lot to learn from the Indian sugar industry. It is only two years since the Indians were asked to leave and the Indian government is supposed to be investigating faulty equipment sold to Fiji by India during the last refurbishment under a ~$90 milion line of credit.
Mackay Sugar has bought the Mossman cooperative, the most northerly of Queensland’s mills [75 km north of Cairns], for $25 million. Mackay believes that it will be able to create farmer incentives which will result in 25% more cane in the first four years of its ownership. Presumably it means that it can offer better cash flow rather than a better price.
Sense has finally prevailed at the Tableland liquid sugar mill in north Queensland. Maryborough [or MSF sugar as we are now supposed to call it], which brought Tableland and other mills from Bundaberg not so long ago, has announced that it will add a back end to turn Tableland into a conventional raw factory.
Following the proposed purchase by Louis Dreyfus, Imperial had to file a history of the soliciting its own sale with the federal Securities and Exchange Commission. It makes fascinating reading with a history going back over two years and shows that even as late as Q1 2012 there were quite a few potential purchasers. Unfortunately it looks as if we will never know who they were unless ‘Bidder A’ [or indeed, B to G] or ‘Private Equity Firm A’ means something to you.
FRUCTOSE CORN SYRUP
Producers of HFCS in the US have been denied the right to call their product ‘corn sugar’ bt that country’s Food and Drug Administration.
By the time you read this there should have been another meeting between American Crystal and its locked out union workers. The union says that it will be bringing new proposals to the meeting in the first week of June but few expect the dispute – which started last July and resulted in the lock-out from August 1 – to be resolved.
It looks as if the deal for Florida Crystals/ASR to rescue Belize Sugar Industries will go through according to a BSI announcement at the end of May. It certainly makes sense for ASR which desperately needs raw sugar for its Thames refinery but does it makes sense for BSI? As regular readers will know, perhaps that company has no choice since its bank decided to pull its loan facility.
This was Long Pond’s first crop after its major refurbishment but things do not seem to have gone well with the total production expected to be just 4 200 tons compared to a budget of 8 000 tons. The company is putting most of the blame on the local farmers who were forced to take a one year break last year but you have to ask whether it was worth investing $11 million in the refurbishment to begin with.
Is the Cuban industry finally turning the corner? The government has announced that this year’s crop, now more or less finished, is 16% above last year’s at 1.32 million tons although still short of the 1.45 million budget.
Guyana, being just north of the equator, has two half crops as the ITCZ moves north and south through the year. Guysuco has just reported that its first crop output was only 71 000 tons against a budget of 90 000. It blames the 21% shortfall on the weather and industrial action.
The Brazilian Centre South harvest is not going as well as expected as rains continue to hamper the harvest. Copersucar has dropped its Centre South forecast back to 500 million tons of cane and 32 million tons of sugar. Meanwhile in the North East seems to be facing drought with one of the biggest growers up there being quoted as saying that ‘The outlook isn't heartening.’
Singapore’s Olam International has announced that it is buying Brazil’s Passos sugar factory for $129 million and that it will invest a further $111 million over the next 5 years to increase the crop and the factory capacity. The annual crush is currently 1.75 million tons [producing 200 000 tons of sugar with no mention of ethanol] and the plan calls for that to increase to 3 million.
Illovo has formalised the actuality by announcing its withdrawal from the Markala project in Mali citing that government’s failure to provide concessional funding and meet its other obligations together with the deteriorating security situation’
The Ghanaian government has announced that the Indian government will help it bring Komenda back into production. Unfortunately the factory is only rated at 1250 t/d and the cane land is only 3,500 acres [~1400 ha]. One member of the Indian delegation in the country last month is quoted as saying that Komenda was bankrupted in the early 1980’s by poor factory maintenance but that is rarely the case and we had always understood there were fundamental issues with the agriculture.
Meanwhile, a private local bank backed by the First Capital of Switzerland investment bank has announced that it will develop a sugar project in Ghana’s Abuakwa State.
Tanzania is claiming that it will soon be a net exporter of sugar although it recently gave out import licences for 100 000 tons to bridge the gap between crops.
Meanwhile, the country seems to be the focus of a very subjective campaign aimed at discouraging the development of bio-ethanol projects there on the basis that they displace food production and displace the population. It is a pity that there cannot be a more objective debate.
We first heard of the Rufiji sugar project down on the Tanzanian coast in 2008 when a Swedish ethanol company called SEKAB announced plans to develop large scale cane ethanol plants in Tanzania and Mozambique, the former being at Rufiji, just south of Dar as Salaam. A company calling itself Rufiji Sugar Plant has now announced the start of a 12,000 ha estate with a 5000 tcd factory producing 125 000 t/a of sugar. It is not clear whether this is the same project or a different one.
GREEN FUEL CHISUMBANJE
Green Fuel, the bio-ethanol company owned by Robert Mugabe and Billy Rautenbach seems to be in trouble because the government won’t mandate a high concentration blend and the country cannot afford flex fuel cars able to burn hydrous ethanol. The plant has not operated at all this year with its storage tanks filled to capacity. When you read the commentary though, what is most strange is that the project is reported to have required $600 million. At that level no wonder the company is in trouble – or is the figure somehow over-stated for some reason?
Local people across the border from TSB’s Komaati factory are talking of a 29 000 ha project irrigated from the Corumana Dam on the River Sabie just after it exits the Kruger. It is unclear how this fits with what TSB is doing in the area as Xinavane is said to be a partner in the scheme and that estate is owned by Tongaat Hulett.
BEET ‘BOLTING GENE’ IDENTIFIED
Sugarbeet’s BvBTC1 gene has been identified as controlling when and whether or not the beet flowers, has been identified by research groups in Europe. The work should allow the seed companies to improve efficiency by minimising yield-reducing seed contaminations and help the development of new varieties with larger beets. You can buy the entire paper online.
WASTE WATER TREATMENT
A US company called ThermoEnergy is claiming that it can recovery all of the sugars in waste streams using its ‘Controlled Atmospheric Separation Technology’ [CAST®]. The system is said to be compact in size, to use less energy than competing technology, to produce higher-quality concentrations and to be very low maintenance. The company claims that it produces 65 brix liquor whilst the effluent is suitable for normal discharge. They don’t seem to be claiming that it is suitable for food grade use, mentioning bio-ethanol feedstock as the likely use.