Sugar Industry News : September 2019
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Another slump in the price with a full cent's loss during August :
The fundamental problem seems to be the large stocks which resulted from the last two years of surplus. This will only be corrected during 2019/20 [unless Indian production collapses again.
WTO APPROVES INDIAN DISPUTE PANEL(S)
Following last month's news item, in mid-August the WTO approved the setting up of panels to consider the complaints raised against India by Brazil, Australia and Guatemala. The three countries asked for a single panel to consider the complaints but India objected, claiming that the complaints were not all the same.
ISO SEEMS QUIETLY OPTIMISTIC
At last month's ASA Sweetener Symposium, Jose Orive [Exec Director] of the ISO predicted a ~3.5 million ton deficit next year growing [or is that shrinking?] to nearly 6 million deficit in 2020/21. The ISO caveat is that consumption growth has fallen to below 1.5% /annum but at a nominal 180 million tons of consumption that is still an annual increase in consumption of 2.7 million tons.
TEREOS TO CLOSE ITS AFRICAN OFFICES
Tereos Commodities announced last month that it would close its offices and Kenya and South Africa, no longer trading there after the end of Q1 next year. The Nairobi office was only opened in 2016. In an associated move, Patrick Dean – who was running the Tereos white sugar book – seems to have been summarily dismissed.
ORASCOM WITHDRAWS FROM NILE SUGAR PURCHASE
Further to our May news item, it is reported that Orascom has withdrawn its offer to buy the shares of Nile Sugar that it doesn't already own.
KWALE SUGAR EMBRACES MODERN TECHNOLOGY
The Kwale sugar estate on Kenya's far south coast [it is only 27km from Tanzania] is 25% owned by Mauritius' Omnicane and the professionalism that that brings is showing. The company has a nucleus estate of about 4 800 ha and is aiming to have a lot of it under [Netafim] drip irrigation. It claims yields of 110 t/ha but the sugar content [and/or extraction efficiency] requires more than 10 tcts.
TONGAAT TO CLOSE MAFAMBISSE
It is reported that Tongaat Hulett is to close its factory at Mafambisse in Moçambique although it says that it will keep Xinavane operating. Mafambisse is about 40 km from Beira in the centre of the country and is 85% owned by TH, 15% by the government.
MAHARASHTRA GOES FROM DROUGHT TO FLOOD
Maharashtra was suffering from drought in the very recent past but now the monsoon has arrived with a vengeance. There are reports that tens of thousands of hectare of cane are under water and some of it is reported to be 1.5 metres deep.
KASET THAI TO BUILD NEW FACILITY
Kaset Thai and its partner 'Global Green Chemicals' are said to have announced a new US$ 1.3 billion sugar factory and biorefinery complex in Nakorn Sawan. The project is spread over several phases with Phase 1 requiring $ 248 million. It includes a 24 000 tcd factory and a 600 000 ℓ/d distillery. Surplus electricity from the 85 MW power station will be exported.
PHILIPPINE INDUSTRY STILL NOT MEETING DOMESTIC CONSUMPTION
The government of the Philippines has again authorised the import of up to a quarter million tons of sugar, 100 000 tons of which can be 'industrial' grade. Even though the industry is faced with a growing demand and no more land, the fundamental problem must surely be the agrarian reform which has led to poor field yields and certainly poor quality cane arriving at the factory [yes, it still looks like cane but at 7 days since cutting …]
MACKAY SALE COMPLETED
The Nordzucker purchase of Mackay Sugar has completed even though one of Nordzucker's prerequisites was not satisfied : some growers, representing 1.5% of the crop, have still not accepted the new cane purchase contract. In the end 95% of the growers also voted for the deal to proceed.
ALMOIZ TO ACQUIRE ISIS
The Pakistani group Almoiz is set to acquire a majority stake in Australia's Isis factory which is located about 270 km north of Brisbane so about 40 km south of Bundaberg. Isis crushes 10 000 tcd.
BRAZIL USING ONLY 35% OF CANE FOR CRYSTAL
Data coming out of Brazil point to only 35% of the cane being used for crystal sugar production in the centre south, the rest is being used for ethanol production because of the economics of the market. We are now about 60% of the way through crop and the actual production is expected to be only 25 million tons, a figure not seen since 2005/6.