Abstract
The European Union is heading into the fourth and final year of its reform of
the Community sugar market regime. This has already brought about significant
change, with one of the most striking effects being the transformation of the
EU from a net exporter of around 5 mln tonnes in the last pre-reform year of
2005/06 to a net importer of between 1.7 and 1.2 mln tonnes respectively in
the two following years (all data in this article are white value). There is
little doubt that sugar arrivals will approach the 4 mln tonne mark in the
foreseeable future, as domestic output has been downscaled permanently.
Community sugar production is now concentrated in 18 member states (as opposed
to 23 before the reform), and nearly 70% of output is in seven member states
where conditions are seen as most favourable for sugar beet cultivation.
One of the key elements of the sugar market reform is the reduction of quotas
(including those for isoglucose and inulin syrup) by 6.0 mln tonnes over the
four-year period. According to Brussels data, EU sugar production in 2008/09
was 15.254 mln tonnes. This compares with a Community-wide quota of 13.153 mln
tonnes and with as much as 19.4 mln in 2005/06.
At the end of February, the Commission released details of the requests which
had been made to renounce quota in the fourth and final year of the sugar
restructuring program, i.e. 2009/10. Apart from the roughly 132,106 tonnes of
sugar already given up in Spain by the end of December 2007, there were no
further quota renunciations by the manufacturers. However, applications for
129,084 tonnes of isoglucose quota to be given up were received during January
2009. These included 69,613 tonnes in Spain, 15,880 tonnes in Romania and
43,592 tonnes in the UK. This means that the UK and Romania will cease
isoglucose production completely.
The Commission also confirmed that funds were available to provide
compensation in full for these requests. The result will be that the Community
isoglucose quota will decrease to 690,441 tonnes in 2009/10 from 819,525 the
previous year.
At the same time, the Commissionapproved a regulation setting new production
quotas for 2009/10. Taking the latest restructuring into account, the overall
sugar quota will be 13,336,741 tonnes - 0.132 mln less than the year before
and a drop of 4.1 mln tonnes, (-23.5%), compared with the pre-reform total.
The new EU-27 isoglucose quota is 690,441 tonnes, up 36% on the prereform
figure (taking into account the additional isoglucose quotas created under the
2006 sugar reform package and the subsequent renunciations). The previous
inulin syrup quota of 320,718 tonnes was completely abolished at the beginning
of the reform process
HIGHLIGTS:
- EU
- Brazil to receive additional TRQ of 300,000 t
- Germany
- Sudzucker sees higher operating profit on flat sales in 2009/10
- Central America
- 2008/09 sugar production to rise only marginally
- Brazil
- CS campaign report - May 1, 2009
- Sudan
- Sugar production may reach 13 mln t by 2019
- India
- 2009/10 Maharashtra sugar output may rise 20% Laos Mitr Phol Group starts
sugar exports
In February, Brussels announced that the sugar market was largely in balance
and that no pre-emptive market withdrawals would be needed for 2009/10.
However, it will continue to monitor the situation and may order a final quota
cut in February 2010. This could be of the order of 310,000 tonnes, given that
its targeted sugar production quota reduction announced in November 2005 has
not yet reached.
The Commission's claim of a balanced market was underlined by its figures
released on April 1, which show a decline of 0.325 mln tonnes to 1.785 mln
tonnes in the end stocks of quota sugar for the current marketing year. This
represents less than 11% of annual consumption, and thus supports Brussels'
assertion.
Output under quota of 13.675 mln tonnes and imports (including those in
processed products) of 3.3 mln tonnes are more than covered by consumption of
16.5 mln tonnes and exports of 0.8 mln tonnes (0.1 mln tonnes as such and 0.7
mln tonnes in products). Thus, it is evident that the Commission's strategy
has dealt with the dramatic fall in Community exports over the last few years.
2.8 mln t Out-of-Quota Sugar in 2008/09
According to data released by Brussels on March 26, total EU sugar output in
2008/09 amounted to some 15.254 mln tonnes. The addition of production carried
forward from 2007/08 brings the total amount available to 15.949 mln, compared
with a revised quota of 13.153 mln tonnes. As a result, some 2.796 mln tonnes
(up from 2.461 mln in 2007/08) will be declared as 'out-ofquota' sugar. This
must be used for non-food industrial purposes (inter alia ethanol), or sold to
the Community's “outermost territories” (the Canaries, Madeira and
the Azores), or carried forward to the following marketing year when it will
form the first part of 2009/10 quota production.
This erstwhile “C-sugar” had to be exported outside the EU under
the old sugar market regime, but the regulation providing for this was
declared illegal by the World Trade Organisation (WTO), a ruling which was
instrumental in setting off the whole reform process. The Commission estimates
that 0.6 mln tonnes of sugar manufactured this season will be carried forward
to 2009/10. 2.4 mln tonnes of out-of-quota sugar are expected to be used by
the non-food and alcohol sectors while a further 0.4 mln will be exported.
Out-of-Quota Exports
For the first time under the new sugar market regime, the Commission opened an
export quota for outof- quota sugar in 2008/09 with the limit set at 650,000
tonnes. These shipments will receive no export subsidies, but the volumes will
still need to be counted against annual WTO limits on subsidised exports,
which apply to the Community on volume and value. This quota relates to the
decision to allow duty-free imports of up to 400,000 tonnes of sugar for
industrial use (see below) to balance the extra availability created by these
imports. Data released by Brussels on May 13 showed that in the current
marketing year, licences have been issued for the ex- port of 432,015 tonnes
of out-ofquota sugar to the world market.
However, actual shipments had reached only 26,242 tonnes by May 13, and the
Commission therefore expects that the total will not reach the maximum
permitted.
Similarly, out of the 50,000 tonne export quota opened for isoglucose,
licences have been issued for 13,926 tonnes, with around 53% of the total
having been shipped so far in the season.
Brussels has already indicated that it intends to open quotas for the same
tonnage for 2009/10. Before 2008/09, it had obviously taken the view that
nothing should be done to encourage production in excess of the quota until
the EU's surpluses had been dealt with. This is now more or less the case, at
least if the evolution of intervention stocks is taken as an indicator.
Imports for Industrial Use
In August 2008, the Community opened an import quota of 400,000 tonnes of
sugar a year exclusively for the Bloc's chemical and fermentation industries
in a bid to end rows over contracts. This import quota applies to both raw and
white sugar, is subject to a zero tariff and will meet half those industries'
requirements. This move was not accepted by some EU member states, as they
assumed that there would be enough out-of-quota sugar in 2008/09 for these
industries. However, there was insufficient opposition to prevent the
Commission implementing its proposal.
These industries, which use sugar in processing, have a yearly battle with the
Community's manufacturers over contractual terms for supplying the raw
material. The latest figures released by Brussels show that by May 8 licences
had been issued for the import of 173,474 tonnes of sugar for industrial use,
less than half of the duty-free quota limit. The main purpose of this
arrangement appears therefore to ensure that out-of-quota sugar sold for
non-food use is traded at prices which offer parity with imports. In 2006/07,
a similar import quota of 200,000 tonnes was opened, but take-up was also not
very high either. Current indications are that 400,000 tonnes will also be
allowed into the EU for use by the chemical and fermentation industries in
2009/10.
Intervention Stocks
Sales of intervention stocks have declined significantly since mid- November
2008, with most tenders resulting in sales of only three- or low-four digit
tonne volumes. At the last tender held on March 26, the Commission sold 750
tonnes of Italian intervention stocks for disposal on the internal market with
no sugar being sold for industrial purposes or for export. The last
significant sale was registered on October 16, when 114,453 tonnes changed
hands.
These inventories built up between March 2005 and October 2006 after it had
become clear that the Intervention System would be abolished under the new
sugar market regime. As a result, producers were able to use the system as an
outlet for their sugar for the last time, with a total of 1.896 mln tonnes
being sold under these arrangements during the period.
Intervention stocks are now quite low (about 33,900 tonnes), the greater
proportion of which is in Italy (29,305 tonnes) although with some smaller
volumes in the Czech Republic, Ireland, and Belgium. Most of the stocks have
already been disposed of through a combination of export subsidies, sale to
the non-food using industries, sale back to the internal market and use as
food aid within the Community. Brussels has indicated that any quantities
remaining unsold at the end of September 2009 will be earmarked for food aid,
thus removing them from the market.
Composition of EU Imports
According to the EU balance sheet mentioned above, total arrivals in 2008/09
(Oct/Sep) are estimated at 3.3 mln tonnes. The likely breakdown of these
imports is as follows:
- 1. Agreed quantities under the Sugar Protocol are 1.3047 mln tonnes
for July 2008 - June 2009, and 326,175 tonnes for the final three month period
from July - September 2009. As the whole quota is usually filled by
reallocations between the origins in question, it is safe to assume that the
July - September 2009 total equals the July - September 2008 volume, so that
the October 2008 - September 2009 total will be a normal 12- month quota, i.e.
1.3047 mln tonnes.
- 2. 230,000 tonnes of sugar will be imported under a transitional
quota for the ACP Protocol suppliers, which will be replaced by the sugar
access arrangements within the new Economic Partnership Agree- ments.
- 3. The Everything-But-Arms (EBA) quota for 2008/09 is 204,735
tonnes which will be delivered in full. Moreover, the LDC countries covered by
these arrangements are allowed to ship additional volumes to the Community
with an 80% duty reduction. Licences have already been issued for 26,994
tonnes of EBA sugar, and the yearly total might reach 50,000 tonnes.
- 4. Over the years, the Community has opened a number of bilateral
tariff rate import quotas for sugar at a reduced rate of duty, collectively
known as CXL quotas. These concessions applicable to Cuba, Brazil and
Australia amount to 126,925 tonnes of raw sugar, and were already used up in
January 2009, i.e. early in the season.
- 5. Romania and Bulgaria are expected to import their transitional
quotas of 528,384 tonnes in full.
- 6. 380,000 tonnes of sugar import quotas were opened under various
agreements in favour of the Balkan states. All but about 90,000 tonnes have
already been allocated. To this total must be added a new quota recently
opened in favour of Moldova, amounting to 18,000 tonnes for the 2009 calendar
year.
- 7. Some 200,000 tonnes of sugar may be brought in for incorporation
into various foodstuffs for re-export.
- 8. Since the opening of the 400,000 tonne import quota for sugar
for non-food uses, the necessary licences have been issued, and will
presumably be used, for the import of 173,474 tonnes of sugar for these
purposes. The annual total could potentially add up to 250,000 tonnes.
Summary and Outlook
The EU's total sugar imports in 2008/09 may reach the Commission's estimate of
3.3 mln tonnes, which will make the Community the world's top sugar importer.
As far as the balance is concerned, Brussels is now confident that the
Community's sugar supply/demand balance is under control, which may indeed be
the case. While it seems that the days of unmanageably large surpluses are now
past, there are still loopholes. Out-of-quota production is still significant,
and it remains to be seen whether all this sugar will find the desired outlet,
especially as far as ethanol is concerned. In addition, if the WTO Doha Round
were ever reach a conclusion and sugar were to be declared a sensitive
product, the standard tariff cut of 70% over five years could be mitigated by
up to two thirds, but only at the expense of a substantial additional import
quota which the Commission puts at between 485,000 and 675,000 tonnes. This
possibility has not been reflected in the EU's balance sheet for sugar, and
would therefore force Brussels to take action to keep the internal market in
balance.
Last but not least, the safeguard clause for EBA-imports - which allows the
Community to suspend duty-free EBA imports for ACP non- LDCs if they exceed
3.5 mln tonnes per annum - will expire after 2014/15 when the EU market will
be theoretically open to unlimited imports of ACP sugar. Consequently, no-one
should be counting on an everlasting period of market stability.
World Market
May 19 - 28, 2009
Global sugar prices climbed to their highest level in three years as funds
poured money into the sweetener amid a fundamental market outlook perceived as
bullish. London white sugar basis October 2009 added $10.60 to $455.70 a
tonne, while white sugar basis March 2010 gained $7.30 to $459.40. Raw sugar
basis October 2009 rose 9 points to 16.62 cents/lb. The spot price for raw
sugar in New York ended 21 points up at 16.96 cents/lb.
The rise in prices limited demand in Brazil's cash sugar market as buyers such
as India and Russia were in no rush to speed up purchases.
Indian mills sealed deals to import around 2 mln tonnes of raw sugar after the
country formally allowed duty-free imports of raws for domestic sale in
February, but they have been absent from the market in the last few weeks due
to the huge rise in international prices. Industry sources pointed out that
current international quotations have made it unviable for mills to process
imported raws unless domestic prices rise significantly. Meanwhile, Russian
buyers are said to need sugar prices of around 13 cents/lb to make it
attractive to buy.
With destinations for raw sugar having dried up for the time being, attention
centered on a harvest update by the Sao Paulo Sugar Industry Association
(Unica), which showed that the 2009/10 Center South cane crush is racing ahead
of last year's pace early in the season, with twice as much cane processed as
this time last year amid higher yields. The CS crushed a record 43.25 mln
tonnes of cane by May 1, compared to 21.43 mln by the same time last season.
231 of the CS's 308 mills were already up and running by this early stage of
the season compared with 166 last year. Sugar output reached 1.68 mln tonnes,
tel quel, during the season by May 1, compared with 673,500 tonnes a year ago.
Unica said many mills lacking cash amid the global credit crisis were in a
hurry to make sales, explaining the higher crush. Large quantities of cane
left in the fields from last season ready to process also enabled them to make
a prompt start to harvesting as well as favourable weather. It said fincancing
which was due to come available would eventually reduce producers' urgency to
sell. The industry reports excellent extraction rates which reached 110.76 kg
of recoverable sugars per tonne of cane compared with 103.70 in the same
period a year ago. Current relative prices make it much more profitable for
sugar mills to produce sugar than ethanol and this is reflected in the
production mix. So far this season 36.8% of the sugarcane crop was processed
into sugar compared with 31.8% last year. CS sugar exports in April amounted
to 1.11 mln tonnes, up by 44% year-onyear.
Central America expects to export 2.43 mln tonnes of sugar in 2008/09,
up 7.5% year-on-year, the Central American Sugar Association said. According
to a report published by Reuters, sugar production in the six countries
(Guatemala, El Salvador, Nicaragua, Honduras, Costa Rica and Panama) will
reach 4.215 mln tonnes, compared with 4.093 mln in 2007/08. Guatemala will
remain the largest sugar exporter, shipping a total of 1.581 mln tonnes,
compared with 1.444 mln.
World sugar production in 2009/10 is estimated at 159.9 mln tonnes, raw
value, up from 148.7 mln in 2008/09, the US Department of Agriculture (USDA)
said. Demand in 2009/10 is seen at 159 mln tonnes, up 1.5 mln tonnes
year-on-year.
Sugar production in Brazil in 2009/10 is put at 36.9 mln tonnes, up 4.5 mln
tonnes. India is forecast to produce 20.8 mln tonnes, compared with 16.8 mln
tonnes, while China's sugar output is seen at 14.5 mln tonnes, up 1 mln tonnes
yearon- year. Brazil's sugar exports in 2009/10 are forecast to reach 24.3 mln
tonnes, up 4 mln tonnes on 2008/09 shipments. Thailand is forecast to export
5.7 mln tonnes, compared with 5.5 mln, the USDA said.
The latest Commitments of Traders indicates that the sugar rally may
have run its course, and that a period of consolidation may lie ahead. The
non-commercial net long position in the No. 11 contract remained almost
unchanged at 171,478 contracts as of May 19 compared with 171,704 lots a week
earlier. Small speculators (non-reportables) increased their net long position
slightly to 40,271 lots from 40,244 lots the week before. The commercial net
short position fell accordingly to 211,749 lots on May 19 from 211,948 lots
the week before.
Business Reported During The Period Under Review And Forthcoming Tenders:
May 16, 2009:
The state-run Trading Corporation of Pakistan (TCP) has bought 50,000
tonnes of white sugar at $474 a tonne in a tender which closed on May 16, a
TCP representative said. The supplier will be Al Khaleej, based in the United
Arab Emirates.
Offers ranged between $474 and $514.50 a tonne. The tender was one of five
issued by the TCP after the government authorised it in February to import
200,000 tonnes of sugar to meet domestic needs, following a lower than
expected sugar crop this season. The next 50,000 tonne tender will close on
May 23. May 29, 2009:
The state-run Thai Cane and Sugar Corp. (TCSC) will open a tender to
sell 60,000 tonnes of 2009/10 raw sugar on May 29, a senior official said.
Half of the volume will be Jspec sugar, and the other half Hi-pol sugar. The
sugar will be sold through a fixed-price tender and buyers can submit prices
in US dollars per tonne, the official added.
Europe
European Union
BRAZIL TO RECEIVE ADDITIONAL TRQ OF 300,000 T
As a result of a bilateral agreement with the European Union, Brazil should
ship an additional EUR200 mln ($278 mln) in sugar, beef and chicken exports to
the European Union, a DJ report said. The bilateral agreement should
compensate for lost Brazilian exports when Bulgaria and Romania entered the EU
in 2007. For example, the agreement should provide Brazil with a quota of
300,000 tonnes of sugar at a reduced tariff of EUR98 a tonne, was added.
Germany
SUDZUCKER SEES HIGHER OPERATING PROFIT ON FLAT SALES IN 2009/10
Sudzucker forecast flat sales but higher operating profit in its 2009/10
(Mar/Feb) business year after 2008/09 operating profit rose 11% to EUR258 mln
($360.4 mln). It now sees 2009/10 sales at the previous year's level of
EUR5.87 bln, compared with an earlier forecast of around EUR6 bln. It sees
operating profit rising to around EUR400 mln in its current fiscal year.
Sudzucker's sugar segment generated higher profit in 2008/09 thanks to reduced
charges from the restructuring phase of the EU sugar market reform. Revenues
fell by 4% to EUR3.320 bln from EUR3.464 bln in 2007/08. Operating profit more
than doubled to EUR137.1 mln from EUR60.5 mln, mainly driven by a sharp
decline in sugar inventory write-offs resulting from the quota return phase in
2008.
The missing profit contributions from the quotas returned to the restructuring
fund were offset by cost cuts resulting from plant closures, cost reduction
measures and the omission of sugar quota write-offs subsequent to the quota
returns, the company said.
The group's 30 factories and three refineries produced a total of 4.21 mln
tonnes of sugar, including raw sugar refining, down from 4.58 mln a year ago.
25.0 (28.2) mln tonnes of beets were processed, while the area sown to beets
fell to 370,200 ha from 438,500 the year before.
United Kingdom
TATE & LYLE FY PROFIT -2.4%, ANNOUNCES CLOSURE OF US SUCRALOSE PLANT
Sugar and food-ingredients producer Tate & Lyle PLC posted a 2.4% drop in
full-year profit and said the global recession made the outlook difficult to
predict, though the new fiscal year has started in line with its expectations.
The company said that its pretax profit before exceptional items in the year
to March 31 dropped to GBP247 mln ($1=GBP0.63) from GBP253 mln the previous
year. The number was hit by destocking, unfavourable pricing and weaker demand
at its European sugar, industrial starches and US ethanol businesses.
The company said it would be mothballing the factory in McIntosh, Alabama,
that makes its artificial sweetener sucralose. Chief Executive Iain Ferguson
claimed that the closure had nothing to do with weakening demand, but a more
efficient manufacturing process has resulted in a 25% increase in yields, with
more improvements still to come, meaning one plant was enough to meet demand
for the foreseeable future. Ferguson insisted sucralose was still a great
business, with volumes rising 6% in the past year. All of the company's
sucralose will now be produced at the more efficient plant in Singapore, it
said. The closure will result in an exceptional charge of GBP97 mln in the
2009 financial year, with a further GBP60 mln to be paid over three years.
Sales were GBP3.55 bln in 2008/09, up from GBP2.87 bln, largely due to the
benefit of the weak UK currency, while net profit dropped to GBP65 mln from
GBP194 mln. Net profit last year was boosted by contributions from a number of
businesses that have since been sold.
Poland
2009 SUGAR BEET AREA SEEN AT 191,000 HA
The area sown with sugar beet increased by 2% in 2009 to about 191,000 ha, the
Statistics Office said. Last year around 188,000 ha were sown to the crop, but
only 170,000 were left due to very warm and sunny weather in May and June,
which caused the soil to crust over and some seeds did not break through,
according to the Polish Union of Sugar Beet Growers.
Russia
SUGAR BEET SOWINGS - MAY 25, 2009
Russian farmers had sown sugar beet on 773,400 ha by May 25, which corresponds
to 88.4% of the targeted area and compares with 812,000 ha sown by the same
date last year, the Russian Sugar Producers Union said. The slow start to the
sowing campaign was attributed to adverse weather conditions.
Russia's sugar beet area fell by 9.4% last year to 966,060 ha, and this year
the area sown is expected to fall by another 10%.
REFINING REPORT - MAY 25, 2009
Russia produced 742,000 tonnes of white sugar from imported raws between the
start of the year and May 25, down 8.1% from 807,000 tonnes in the same period
last year, the Russian Sugar Producers Union said. The refineries received
426,000 tonnes of imported raws during the period, compared with 780,800 in
the corresponding period last year. The year-on-year difference in refining
narrowed significantly in recent weeks as the plants began receiving more raws
after the country cut its raw sugar import tariff from $220 per tonne to $165
on May 1. Refining was 13.6% lower than a year ago on May 11 and 10.9% behind
on May 18.
America
United States
SUGAR BEET SOWINGS - MAY 24, 2009
US farmers had sown sugar beets on 94% of the targeted 2009 area on May 24, up
significantly from 64% a week ago but behind last year's 100%, USDA data
shCAMPAIGN REPORT - owed.
Cuba
GROWTH FORECAST LOWERED
Cuba's economy is expected to grow just over 2% in 2009, down from a previous
forecast of 6%, state media said. Economy and Planning Minister Marino Murillo
was quoted as saying that the global financial crisis had hurt Cuban exports
and reduced tourist visits to the island. Cuba which relies heavily on tourism
and exports of sugar and nickel, is struggling with a shortage of foreign
reserves as a result of the global crisis, three damaging hurricanes and
structural problems in its economy.
Mexico
CAMPAIGN REPORT - MAY 16, 2009
Sugar production in 2008/09 in the week ended May 16 amounted to 89,030
tonnes, tel quel, down from 171,058 tonnes produced in the same week a year
ago, the National Cane Workers Union said. This brought cumulative production
so far in the 2008/09 season (Nov/Oct) to 4.844 mln tonnes, down by 6.61% on
the 5.187 mln produced in the same period a year ago. Total sugar output in
2008/09 is seen at no more than 5.05 mln tonnes, tel quel, down 8.5%
year-on-year.
Central America
2008/09 SUGAR PRODUCTION TO RISE ONLY MARGINALLY
Central America expects to export 2.43 mln tonnes of sugar in 2008/09, up 7.5%
year-on-year, the Central American Sugar Association said. According to a
report published by Reuters, sugar production in the six countries (Guatemala,
El Salvador, Nicaragua, Honduras, Costa Rica and Panama) will reach 4.215 mln
tonnes, compared with 4.093 mln in 2007/08. Guatemala will remain the largest
sugar exporter, shipping a total of 1.581 mln tonnes, compared with 1.444 mln.
Brazil
PHB INDUSTRIAL TO RAISE PLASTIC PRODUCTION FROM SUGAR
PHB Industrial, which turns sugar into a biodegradable plastic, plans to raise
its annual production capacity from 50 tonnes at present to 36,000 tonnes
within the next years. The pilot plant has been operating at the Usina da
Pedra in Serrana, Sao Paulo, since 2000. Currently, only 5% of the total
production is sold in Brazil with the rest being exported to Europe, the
United States and several countries in Asia, particularly Japan.
CS 2009/10 CANE CRUSH TO REACH 550 MLN TONNES - JOB
Brazil's Centre/South cane crush in 2009/10 could reach 550 mln tonnes, up 10%
from the 500 mln in 2008/09, market research company Job Economia said. Sugar
production is put at 30.3 mln tonnes, up 13.5% from 26.7 mln in 2008/09.
Ethanol output is forecast at 26.8 bln litres compared with 24.8 bln the
previous season. Currently the crushing capacity in the Centre/South is
limited at 550 mln tonnes as a result of which an additional 20-40 mln tonnes
of cane could be left uncut in the fields. Job sees 43% of the CS cane crop
going into sugar, up 2 percentage points from last season.
The cane crush in the North/Northeast is estimated at 70 mln tonnes, up from
66 mln in 2008/09. Total Brazilian sugar exports could rise by at least 3.9
mln tonnes to 25.3 mln in 2009/10. Of this, 22 mln would come from the
Centre/South. Ethanol exports are seen at 3.6 bln litres, down 1 bln litres,
yearon- year. Domestic ethanol consumption is estimated to reach 25.9 bln
litres compared with 22.6 bln last season.
CS CAMPAIGN REPORT - MAY 1, 2009
Sugar production in the Centre/South in 2009/10 in the period ended May 1
amounted to 1.682 mln tonnes, tel quel, up from 673,500 tonnes produced in the
same period a year ago (+206%), growers association Unica said. The total cane
crush rose by 102% year-onyear to 43.248 mln tonnes while ethanol production
was up by 100% at 1.780 bln litres. The industry reports excellent extraction
rates which reached 110.76 kg of recoverable sugars per tonne of cane compared
with 103.70 in the same period a year ago. Current relative prices make it
much more profitable for sugar mills to produce sugar than ethanol and this is
reflected in the production mix. So far this season 36.84% of the sugarcane
crop was processed into sugar compared with 31.8% last year. As of May 1, a
total of 231 units had started crushing in the Centre/South compared with 166
at the same time last year. Centre/South sugar exports in April amounted to
1.11 mln tonnes, up by 44% year-onyear, while ethanol exports dropped by 13.2%
to 210 mln litres.
Africa
Kenya
SUGAR OUTPUT SEEN RISING TO 600,000 T IN 2009/10
Kenya's annual sugarcane production could outstrip demand in 2009/10 if mills
are fully utilised, an annual industry report by the Kenya Sugar Board (KSB)
said. It added that a survey earlier this year estimated cane production at
about 8.15 mln tonnes against forest consumption of 6.38 mln. The excess cane
has been caused mainly by inefficiency in the utilisation of the milling
capacity which currently stands at 56.25%, the report said. The industry has
the capacity to produce 600,000 tonnes of sugar in 2009/10, the Board said.
Total sugar production dropped slightly in 2008 to 517,667 tonnes from 520,404
during the previous year as a result of post-election violence which saw acres
of cane torched. The output could have been much lower but the entry of a new
mill boosted production by over 28,000 tonnes.
The East African country exported another 218,607 tonnes to plug a shortfall
in supply, compared with imports of 230,011 in the previous year. Countries in
the regional COMESA bloc supplied about 55% of the imports. Swaziland, Egypt
and South Africa were the main suppliers. Kenya also exported 44,332 tonnes,
more than double the 20,842 tonnes it sold in 2007. The main recipients of the
sugar were Sudan, Ethiopia, Britain and Rwanda.
Mozambique
SUGAR OUTPUT TO RISE MORE THAN 50% THIS YEAR
Mozambique expects to produce 320,700 tonnes of sugar, tel quel, this year, up
from the 250,000 tonnes achieved in 2008, the government's Agricultural
Promotion Centre CEPAGRI) said. The forecast represents a significant downward
revision of a previous 2009 projection of 419,200 tonnes.
The area under cane would rise by 30% to 40,318 ha. At the same time molasses
output could reach 101,000 tonnes compared with 78,000 in 2008/09. Sugar
exports to the European Union in 2009 are forecast to rise to 195,000 tonnes
compared with total shipments of 175,000 tonnes in 2008.
Sudan
SUGAR PRODUCTION MAY REACH 13 MLN TONNES BY 2019
Sudan aims to produce 13 mln tonnes of sugar over the next 10 years, Industry
Minister Jalal Yousif Al-Degair was cited as saying. Al-Degair met
representatives of Awna Investment, a Moroccan company, to discuss the Gafa
project, which will produce 43,000 tonnes of sugar a year when output begins
in three years, it was added. Currently Sudan produces around 850,000 tonnes
of sugar. The Gafa project is located in the White Nile region.
Asia
China
GUANGXI SUGARCANE AREA TO FALL BY 10% IN 2009/10
The area planted to sugarcane in Guangxi, China's largest sugar producing
region, may fall 10% in 2009/10 to 967,000 ha from 1.08 mln in 2008/09,
according to the Guangxi Sugar Wholesale Market.
Guangxi produced 7.63 tonnes of sugar, white value, in 2008/09, down by 19%
from a year earlier.
India
SUGAR EXPORTS TO REACH MORE THAN 100,000 TONNES IN 2008/09
India will export more than 100,000 tonnes of sugar in the 2008/09 sesaon
despite a domestic shortage. Shipments for the first six months of the current
cycle which runs from October to September, are estimated at 137,000 tonnes,
all of which under the so-called Advance Licence Scheme (ALS).
Under the ALS, traders and millers are allowed to import raw sugar at
zero-duty when there is a shortage in the country with an obligation to export
similar quantities of refined sugar within a prescribed period. After a gap of
one year, the central government has re-introduced the release order mechanism
for both under Open General Licence (OGL) and ALS. The release order mechanism
makes it compulsory for exporters to seek permission from the Food Ministry
before undertaking shipment.
The export release order mechanism under OGL was made effective from January
1, 2009, while under the ALS, it was from February 13 this year. Industry
sources said that the central government has not allowed export even under ALS
after February 13 and whatever quantity has been shipped this season is prior
to that.
FMC SUSPENDS NEW SUGAR FUTURES
India's Forward Markets Commission (FMC) has barred the launch of new sugar
futures contracts until the end of 2009, a move that analysts say may hit
imports as buyers would not be able to hedge their risks, Reuters reported.
The FMC has also forbidden traders from opening new positions in existing
contracts. Currently there are six contracts on the National Commodity and
Derivatives Exchange (NCDEX), the leading exchange in agricultural
commodities, with the last contract expiring on November 20.
2009/10 MAHARASHTRA SUGAR OUTPUT MAY RISE 20%
Maharashtra, India's largest sugar producing state, may raise output by 20% in
2009/10 (Oct/Sep) as farmers are planting cane over a larger area to take
advantage of better prices, said Prakash Naiknavare, Managing Director of the
Maharashtra Sugar Cooperative Sugar Factories Federation Ltd. He pegged the
area under cane in 2009/10 at 886,000 ha, compared with 770,000 in 2008/09.
In 2008/09, the state produced only 4.6 mln tonnes of sugar, white value, down
from 9.1 mln the year before. The state's production in 2010/11 is likely to
rise further to 9 mln tonnes, while acreage is expected to touch 1 mln ha,
Naiknavare added.
SMP TO RISE BY 33% IN 2009/10
India may increase the Statutory Minimum Price (SMP) for sugarcane by 33% to
increase plantings and stem a decline in production of the sweetener, a
government official said. The Food Ministry may recommend to the Cabinet a
price of INR1,077.60 (INR1=$47.92) per tonne compared with INR811.80 in
2008/09, said the official, who did not want to be identified.
A decline in sugar production for the second year has forced the South Asian
country to become a net importer for the first time since 2006, and fuelled a
31% rally this year in raw sugar prices. The proposal comes as the Congress
Party returned to power with its allies in elections that ended May 16,
winning 21 seats in Uttar Pradesh, India's biggest sugarcane producer,
compared with nine in 2004. The country's 50 mln sugarcane farmers, a powerful
voting block, shifted to grains and oilseeds last year because of a delay in
payments by mills.
The delay in deciding on the SMP for 2009/10 is not expected to negatively
affect farmers' planting plans as mills already paid higher prices than the
SMP in 2008/09, industry sources said.
Indonesia
GOVERNMENT PERMITS REFINER TO MPORT RAW SUGAR
Indonesia has issued a permit to sugar refiner PT Sentra Usahatama Jaya to
import 100,000 tonnes of raw sugar from May to October, said Yamin Rachman,
Executive Director of the Sugar Refiners Association. The firm had previously
obtained permits to import 193,125 tonnes of raw sugar during the first half
of this year. Rachman also said that in the first five months of 2009, food
and beverage firms had imported 22,190 tonnes of white sugar out of total
permits of 28,824 tonnes.
Laos
MITR PHOL GROUP STARTS SUGAR EXPORTS
Mitr Lao Sugar, a subsidiary of the Mitr Phol Sugar Group of Thailand,
recently started its first shipment of premium raw sugar to the European
Union. Mitr Phol's subsidiary in the country will crush a total of 230,000
tonnes of sugarcane which will be processed into 23,150 tonnes of sugar in
2008/09. Of this 22,940 tonnes are exported to the EU under a contract with
Tate & Lyle. The remaining output is expected to be distributed in the country
itself in the third quarter of the year.
Currently, Mitr Lao is expanding its sugarcane plantations from 6,400 ha in
2008/09 to 10,000 ha in 2009/10. At the same time the processing capacity is
to rise to 450,000 tonnes of sugarcane with sugar output seen at 50,000 tonnes.
Pakistan
TCP BUYS 50,000 T WHITE SUGAR
The state-run Trading Corporation of Pakistan (TCP) bought 50,000 tonnes of
white sugar at $494.40 a tonne from Dubai's Al-Khaleej in a tender that closed
on May 23, a TCP official said. The TCP, which issued the tender on April 23,
had already bought 50,000 tonnes of white sugar from Al Khaleej one week
earlier in a tender opened on May 16.
The TCP has issued a total of five tenders since the government in February
authorised it to import 200,000 tonnes of sugar to meet domestic needs
following a lower-than-expected 2008/09 sugar output. A tender issued on April
30 for 50,000 tonnes will close on May 30, while another issued on May 6 to
import 25,000 tonnes of white sugar will close on June 6.
