World Sugar News for April 2012

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• Construction of Kwale Sugar set to begin - Sugaronline

  Kenya’s construction of the KES16 billion (US$192.7 million) Kwale integrated sugar project is set to begin after a six-month delay, raising hope of reducing the country's production deficit, according to Kenya's Daily Nation newspaper. Kwale International Sugar Company Ltd (Kiscol) said Epco Builders Ltd was mobilising resources to begin construction after winning the contract. "We had a delay in starting the work because it took longer than expected to award the contract. We had to do a lot of due diligence on the contractors to ensure we have the best hands. We now have a contractor and work starts any time now," spokesman Hashil Kotecha said. Construction of the facility, set to be run as a joint venture between Kiscol and leading Mauritian sugar producer Omicane, was scheduled to kick-off in October 2011 and the initial batch of products rolled out by October this year.

• China's sugar output continues to soar in March – FO Lichts

  Following its strong recovery in February, China's sugar output continued to soar in March after a slow start to the season, China Sugar Association (CSA) data showed. Total sugar output in the country during March 2012 reached 2.274 mln tons, white value, up 28% from 1.773 mln produced in the same month a year ago. All but 19,650 tons of the total was cane sugar while the beet campaign had already been concluded in the same month last year. This brought total sugar production in the first half of 2011/12 (Oct/Sep) to 10.745 mln tons, up 9.6% from 9.804 mln tons produced in the same period a year ago. Cane sugar output rose 8.1% to 9.742 mln tons from 9.010 mln, while beet sugar production increased to 1.003 mln tons from 793,800 by this time last year.

• EU Committee officially approves previously leaked proposals to increase sugar supply – FO Lichts

  As expected, the Sugar Management Committee of the EU approved previously leaked proposals to increase sugar supply on the domestic market during the current 2011/12 season at its meeting on April 12. The Commission will make available an additional 250,000 tons of out-of-quota sugar for sale onto the bloc's market. Buyers of that sugar will have to pay a levy of EUR211 per tonne on the sales, and the maximum volume per application will be 50,000 tons. Sales of out-of-quota sugar for food use are usually subject to a levy of EUR500 per tonne, but the EU had already allowed a first tranche of 400,000 tons of out-of-quota sugar for sale on the internal market earlier this season at a levy of only EUR85 per tonne. The levy now to be paid is slightly higher than the previously rumoured EUR200 per tonne, while the draft had included only a volume of 30,000 tons per application. The EUR211 levy is based on the difference between the most-recent average monthly EU white sugar price of EUR701 per tonne and the average monthly world market price of EUR490 per tonne, the Commission said. In a separate decision, the EU's Sugar Management Committee agreed to bring forward the three remaining tenders to import raw and white sugar at reduced duties planned for June 6, June 27 and July 11 to May 2, May 23 and June 6, respectively. Two further standard measures have also been taken for the 2012/13 season: opening a duty-free tariff rate quota for 400,000 tons of sugar for industrial purposes and fixing the export limit for out-of-quota sugar at 650,000 tons.

• Good beet crop led to all time high for ethanol production - Sugaronline

  Meanwhile, a strong rebound in ethanol production from molasses and sugarbeet in Q4 helped to lift total 2011 ethanol production to a new all-time high of 1.838 billion litres, according to Agra-Net. Total beet alcohol production in Q4 was 347 million litres as the country took advantage of record sugar yields. Grain alcohol production was also higher than in each of the preceding three quarters, reaching 254 million litres. This brought total production in the fourth quarter to 622 million litres against 394 million in Q3. Ethanol use in 2011 reached 935 million litres, agriculture agency FranceAgriMer said. However, these numbers do not include the net imports of ethanol in ETBE and might therefore be regarded as understated. Fuel continues to be the largest market for ethanol in France accounting for 738 million litres, followed by industrial uses with 90 million and alcoholic beverages with 76 million.

• Unica sees only modest recovery in Brazil's Centre/South sugarcane crush in 2012/13 due to drought – FO Lichts

  Brazil's key Centre/South sugarcane region should crush 509 mln tons of sugarcane in the upcoming 2012/13 crushing season, which would be up only a modest 3.2% from 493.3 mln in 2011/12, industry association Unica said in its first official forecast for the new season. It pointed out that the cane crop was looking very good at the beginning of the year, but a severe drought in February and March heavily damaged plant growth, which led Unica to estimate that cane yields will remain at last year's disappointing 68.7 tons per ha. The increase in crushing will therefore be exclusively due to an estimated 3% increase in harvest area. Unica expects the cane's sucrose content to rise by 1.8% to 140.0 kg of  recoverable sugars (ATR) per tonne of cane from 137.53 a year ago as the expectation of a shorter crushing season should allow mills to process the cane at optimal maturation, while current climatic conditions do not indicate a repeat of last year's cane flowering, which reduces its sucrose content. The share of cane used for sugar production is seen at 48.75% in 2012/13, up marginally from 48.43% in 2011/12.

• DJ MARKET TALK: UBS Ups Sugar Price View But Warns Of Coming Fall - Sugaronline

  UBS increases its forecast for raw sugar in 2012 to 22c/lb, from 20c/lb, as ongoing uncertainty around the Centre-South Brazil crop means that prices have outperformed expectations. However, the bank adds that unless production expectations in Brazil deteriorate significantly from here, there is no way for prices to go other than down. UBS cuts its Brazilian cane production estimate to 510M metric tons, but notes a better crush in India and Thailand lifts its world raw sugar surplus estimate to 7M tons, from 6M tons. It adds that developments with the EU quota system and Black Sea beet planting expectations are key areas to watch.

• New product for energy drinks from sugarcane - Sugaronline

  A food company says it's found an alternative to chemical sweeteners that are used in soft drinks and juices, according to the Australian Broadcasting Corp. The company Nutraceutical and Natural Products is extracting what it claims is a chemical-free electrolyte from Australian sugar cane. Chief executive Mike Lehman says the product is a natural ingredient and appealing to the multinational food companies. "Certainly we've got discussions with major bottlers around the world with regards to adding it to sports drinks, mainly because what's presently comprising sports drinks out in the marketplace are chemically-derived slurries," he said.

• EU preparing to approve Red Tractor beet sustainability scheme - Sugaronline

  The updated Red Tractor farm assurance scheme for crops and sugarbeet is on the verge of being officially accepted EU-wide in time for this year's harvest, according to the UK's Farmers Guardian. The Red Tractor Crops and Sugarbeet Scheme submission to the EU Commission for recognised voluntary status has now entered the final stages of approval. The move is designed to help give crops and sugarbeet producers a head start in the biofuels market while keeping the burden of new EU regulations to a minimum. It will mean Red Tractor farm assurance will become the route for farmers to demonstrate they meet the new sustainability requirements for biofuel crops under the Renewable Energy Directive (RED).

• Thailand's sugarcane crush stalls during Songkran week – FO Lichts

  Thailand's daily sugar production fell to abysmally low levels of as little as 5,500 tons during the Thai New Year (Songkran) festival, industry data showed. The total cane crush advanced only slightly from 95.0 mln tons to 95.6 mln in the week to April 18, which compares with 85.4 mln tons at the same time in 2010/11. Mills were mostly remelting raws into whites during the week-long celebrations. Total sugar output rose to 10.283 mln tons, raw value, from 10.206 mln a week earlier, which compares with 9.092 mln tons produced by the same day a year ago. White sugar accounted for 3.358 mln tons of the total, up from 3.177 mln at this time a year ago.