Sugar Industry News : June 2021


 

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WORLD PRICE

Raw sugar prices hovered around the 17 cent mark in May, trading mostly in a 1 cent range between 16.50 and 17.50 with some strong spec buying during the middle of the month briefly pushing prices as high as 18.25 before a better than expected harvest update out of Brazil's UNICA body took the steam out of any upward momentum. This event set the tone for the remainder of the month with a mostly flat macro picture seeing prices settle at 17.51. Refining margins were steady with the white premium almost unchanged at just under $80/ton. The Brazilian Real stengthened throughout the month as inflationary fears continued to drive expectations for future interest rate hikes by the Brazilian central bank. Latest indications are that the central bank is fully expected to follow through on its promise to raise interest rates by 75 basis points next month to 4.25%. :

World Price

White Premium

CUBA SUGAR HARVEST DOWN, ECONOMIC WOES CONTINUE

With Cuba's 2020/21 sugar harvest drawing to a close, production stands at little more than two-thirds of planned levels, indicating the smallest crop in more than a century. Cuba consumes between 600,000 and 700,000 tonnes of sugar a year domestically and has an agreement to sell China 400,000 tonnes annually. It is not yet clear if Cuba plans allocate less sugar for domestic use, exports to China or both

CRISTAL UNION REPORTS BETTER THAN FORECAST PROFIT RESULT

The second largest French sugar cooperative announced better than expected results for its 2020/21 financial year. The cooperative group made a 69 million euros profit in the year to Jan. 31 after two years of losses thanks to higher sugar prices also supported by a restructuring of its activities and high sales of alcoholic disinfectant gel to combat the spread of COVID-19. This number was up from the 40 million euros originally forecast in January.

NORDZUCKER RETURNS TO PROFIT

With an operating profit of 81 million euros compared to last year's loss of 14.6 million euros, Nordzucker returned to profit in 2020/21. Developments in the market, with very stable prices in the EU, underpinned the positive business performance. A slight pandemic-related decline in sales, on the other hand, had only a minor impact on earnings. The majority 70% interest in Australia’s second largest sugar milling company Mackay Sugar Ltd. developed in line with expectations and again made a positive contribution to group earnings in 2020/21.

TEREOS SEEKS TO EXIT VENTURES IN ROMANIA, CHINA

French sugar producer Tereos is reportedly seeking to exit its ventures in China (Starch) and Romania (Sugar) as part of a wider move by the new management to divest some international assets to lighten the group's debt profile and boost profitability. Wilmar is believed the buyer of interest for Tereos's 49% in its China Starch joint venture.

SUEDZUCKER UPBEAT ON NEW YEAR, STRONG EU SUGAR MARKET SEEN

Europe’s largest sugar producer gave an upbeat outlook for its 2021/22 financial year with a stronger EU sugar market expected to improve its performance. Suedzucker latest forecast is for a group operating profit of between 300 million and 400 million euros. Suedzucker estimates that the sugar sector’s 2021/22 result will range between break-even and an operating profit of 100 million euros.

ISO SEES RISE IN EU PRODUCTION IN 2021/22

According to the International Sugar Organisation (ISO), sugar production in the European Union is expected to rise by 800,000 tonnes in the 2021/22 season to 14.7 million tonnes, despite a small decrease in beet plantings. According to the ISO's latest estimates, EU's sugar imports will decline to 1.45 million tonnes, while exports are also seen falling to 700,000 tonnes in 2021/22.

FLOUR MILLS OF NIGERIA TO INVEST USD 300 MILLION IN NEW RAW SUGAR MILL PLUS CANE PLANTATION

Flour Mills of Nigeria Plc (FMN), an integrated food business and agro-allied group, recently announced an initial investment of USD 300 million to build a new raw sugar mill in Nasarawa State along with the development of a cane plantation covering 15,000 hectares. The project is set to increase FMN's existing cane area under cultivation by 150 percent. Golden Sugar Company, an FMN wholly owned subsidiary, already operates one of the largest refineries in Nigeria (Lagos) with the capacity to refine 750KMt per annum.

MSM CLOSES STRONG Q1, FOCUSES ON JOHOR REFINERY RESTART

MSM Sugar Refinery (Johor) , a wholly-owned subsidiary of MSM Malaysia Holdings, has completed its boiler rectification works as part of its improvement programme and is expected to resume sugar production and packing during the first week of June. During the period of shutdown from March 21, 2021, MSM managed to fulfil its domestic sales commitment by utilising its remaining available stocks in MSM Johor and MSM Prai Bhd.

POTENTIAL INDIAN SUGAR EXPORTS, FIRM FUTURES WEIGH ON THAI QUOTA B PREMIUMS

Thailand’s third Quota B raw sugar tender on May 12 saw lower average cash premium bids for the 2021-22 marketing season, with trade sources citing expectations of Indian sugar exports for the next season and stronger international futures prices putting a pressure on Thai sugar premiums. The average bid was 96 points or 0.96 cents per pound over the #11 March 2022 contract. Thai sugar producers were beleived to be targeting cash premiums at 135 points, similar to that which traded in the first and second Quota B tenders.

ASR BALTIMORE REFINERY RESUMES FULL OPERATIONS AFTER FIRE

American Sugar Refining's Baltimore Sugar Refinery, which produces sugar under the Domino Sugar Brand, resumed full operations following a fire that caused eight days of only partial operations. According to refinery officials, the fire began in the raw sugar shed, which is a free standing structure and did not spread to other buildings on the site. The fire did not enter or damage the refinery building.

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