Sugar Industry News : September 2020
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The sugar price continued a slow rise in August but closed off a peak above 13 ¢/lb at about 12.8 ¢/lb :
Is this the start of a downward correction?
BRITISH SUGAR BEET CONTRACTS INCLUDE VIRUS ASSURANCE
British Sugar has introduced a £12 million [$16 million] fund to protect its beet growers from the adverse effects of virus yellows. That contrasts sharply with the approach in France [see below].
FRANCE TO RESCIND NEONICS BAN
France has announced that it is joining Belgium, Poland and Spain in rescinding the ban it imposed on neonicotinoid pesticides in accordance with EU regulations. Part of the argument, with respect to sugarbeet, is that using neonics on the crop doesn't have significant impact on bees because the crop is harvested before flowering.
AGRANA CLOSING LEOPOLDSDORF
Agrana, the Austrian sugar company, has stated that is closing its Leopoldsdorf factory east of Vienna, concentrating all production at Tulln an der Donau. The reason given is the ever dwindling size of the beet crop in Lower Austria.
FINASUCRE REPORTS LOSS
Finasucre, the Belgian sugar company controlled by the Lippens family that also owns factories in other countries including those of Bundaberg in Australia, is the latest European group to announce a loss. In this case it is an EBIT loss of €41 million.
NEW UK IMPORT QUOTA
The UK government has announced an additional tariff-free quota for 260 000 tons of raw sugar, effective from January 2021 [i.e. at the end of the Brexit transition period]. It is understood that it will be possible to source the sugar from countries not covered by the ACP agreement.
KENYA WANTS TO TRY FOR PRIVATISATION VIA LEASING
Kenya has failed to privatise its five state-owned sugar factories year after year so now it wants to lease them out on 25 year leases having cancelled all of their debts [totalling some $ 570 million]. That doesn't change the fundamental problem : they are just not attractive businesses.
Since the announcement, an Employment court judge has suspended any such leasing until a case bought by a labour union about lack of consultation is heard.
UP TO PAY FOR ITS COOPS' CANE ARREARS
The state government in Uttar Pradesh has announced that it will 'lend' nearly $70 million to its 24 state run cooperative sugar factories to pay the cane growers the arrears that they are due. There is little chance of the loans every being repaid. Interestingly, the state will pay the growers direct, not through the cooperatives [nothing to do with a lack of trust of course].
BANGKOK UPPER COURT ALLOWS CAMBODIAN CLASS ACTION
A Bangkok civil court has overturned last year's finding that a large group of Cambodian farmers could not bring a class action against Mitr Pohl over its ill-fated Angkor Sugar operation. That allows the case, which claims that it was Mitr Phol's fault that the Cambodian government evicted the farmers from what they claim was their land, to proceed.
THAILAND CONFIRMS RAIN BENEFITS
The Thai Sugar Millers Corporation has issued a positive statement after the return of the rains last month but it has not yet issued its own forecast for the 20/21 crop. It expects to do that later this month.
INDONESIA'S PTPN III PLANS TO DOUBLE PRODUCTION
PTPN III, one of Indonesia's state-owned conglomerates, has announced that it wants to double its sugar production from ~ 1 million tons to 2 million. That would be no mean feat as it currently has IDR 45 trillion [$3 billion] of debt. It has said that it is close to a restructuring deal for that.
MSF SELLING 5400 HECTARES OF MARYBOROUGH CANE LAND
MSF, the Queensland sugar group now owned by Mitr Phol, is selling 5400 hectares of cane land to a trust fund that wants to convert the land to macadamia production. The existing cane will be taken off as it crops but after that the Maryborough factory will be short of about one third of its throughput unless other local growers fill the gap.
ALMOIZ'S TAKEOVER OF ISIS COLLAPES
It is now over a year since it was announced that the Pakistani group Almoiz was set to acquire a majority stake in Queensland's Isis cooperative. The Isis board announced last month that it was cancelling the deal because Almoiz has been unable to complete and is not likely to be able to do so any time soon.
FIRE AT CHALMETTE REFINERY
Last month ASR stopped refining at Chalmette in anticipation of hurricane Laura. During the restart a fire broke out in one of the refinery's silos and spread to a second one. The cause is not yet known but there does not seem to have been an explosion and nobody was injured. The fire was brought under control in two hours.
BRAZIL US TRADE WAR LOOMING?
It looks as if there may be a major problem in the trade relations between Brazil and the US as Brazil's tariff-free quota for US ethanol expired at the end of August. The government is refusing to enter a a new agreement unless the US provides a reciprocal agreement for Brazilian sugar entering the US.