Sugar Industry News : April 2021
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The sugar price retreated in March, ending the month at just below 15 ¢/lb :
We seem to be back in uncharted territory : is this the start of a steady decline or just a backing off to a more sensible price level?
ISO INCREASES ITS DEFICIT FORECAST
The International Sugar Organization has increased its forecast of the 2020/21 deficit from 3.5 million tons to 4.8 million
UK WILL NOT PERMIT NEONICS THIS YEAR
As a result of a cold winter, the impact of virus yellows on the UK beet crop is expected to be only about 10% [compared to nearer 90% in 2020] so the UK government will not permit the use of neonics after all. That leaves the UK farmers at a distinct disadvantage compared to many European farmers where neonics have been permitted.
NORFOLK FARMERS CONFRONT BRITISH SUGAR
Last month a large group of East Anglian beet farmers met with British Sugar, demanding a major increase in the price that the company pays for beet. Farmers are said to currently get £21 per ton but they want something over £30. The farmers, however, are in a quandary : if they don't grow beet, what do they grow?
EUROPEAN FARMERS TURN AWAY FROM BEET
Farmers in the EU and the UK are losing enthusiasm for sugarbeet. The causes seem to be partly the impact of virus yellows and partly poor prices. France is expecting a 6% reduction in area and the UK as much as 15% lower, year on year. That difference is perhaps a reflection of the UK government not proceeding with its re-permitting of neonics.
UK TO INCREASE TO E10
The government in the UK has announced that it will legislate for E10 petrol [gasoline] from this coming September. Current legislation is for E5 but it is not mandatory. Super grade fuel will remain at E5 to allow older vehicles [with systems not able to use E10 or above] to continue to operate.
RUSSIA MAY REMOVE IMPORT TAX
Moscow has indicated that it is considering letting up to 350 000 tons of white sugar into Russia free of any tariffs. It is not clear whether the statement is just a shot across the bows of the domestic producers or a sign of significant shortages in the country.
LDC SELLS IMPERIAL TO USSC
Louis Dreyfus announced that it was selling Imperial Sugar to US Sugar towards the end of last month, a deal which was clearly kept under tight wraps until then. LDC bought Imperial, the refinery in Savannah GA, about 8 years ago. It is not clear what deal means for USSC's Clewiston operation which has a large co-located refinery of its own.
EXPLOSION AT MINN-DAK
There was a relatively minor sugar dust explosion at the Minn-Dak factory on March 22. The only injuries seem to have been two workers hospitalised for smoke inhalation. What is worrying is that the factory had a coal dust explosion in the boiler house just 6 months before. It is not clear what caused the latest explosion.
MORE GLOOM IN CUBA
The current crop is not going well in Cuba. Azcuba had set a not at all ambitious budget of producing 1.2 million tons of sugar but some estimates are predicting as little as 900 000 tons by the time the crop ends in May [if the weather holds]. Cuba has a 400 000 ton contract with China which would leave only 500 000 for domestic consumption when demand is said to be between 600 and 700 000 tons.
CARGILL CONFIRMS ALVEAN EXIT
Back in the February news we reported a rumour about Cargill leaving Alvean, its trading JV with Copersucar, Cargill finally confirmed the story at the very end of March, saying that it was selling its 50% share to its partner for an undisclosed sum. The JV lasted about 6 years. Following the announcement, new rumours started, saying that Copersucar was looking for another strategic partner.