World Sugar News for December 2011

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• Rabobank sees 2012 sugar prices down 12% - Sugaronline

  
  Rabobank says sugar prices 2012 are forecast to fall by 12% as the market records a surplus for the first time in three years, according to BakeryandSnacks.com. However, some instability is expected into mid-2012 as crop sizes remain uncertain and the industry plays catch-up on a three year deficit. In its recently published report ‘Outlook 2012-Down But Not out', Rabobank has forecast the mean raw sugar price for 2012 at 22.6 cents, down 12% on the mean 2011 price of 25.8 cents. "With global ending stocks expected to increase about the 10-year average for the first time since 2008/09, we anticipate NY raw sugar prices will ease and reach an average level of 22 cents in Q4," said the report.

• CGB sees France producing record sugar beet crop in 2011 – FO Lichts

  
  France should produce its biggest-ever sugar beet crop in 2011 on the back of record yields, growers group CGB said. CGB estimates the 2011 crop at about 37 mln tonnes, up from a 36 mln tonne estimate issued last month and compared to the almost 32 mln produced in 2010. The average yields, assuming a standardised sugar content of 16%, would also set a record at 96 tonnes per ha, Alain Jeanroy, the CGB's Managing Director, said. This would break the record of 94.6 tonnes per ha reached in 2009.

• Greenfield investments seen becoming more attractive – FO Lichts

  
  Rising prices of existing cane mills in Brazil are turning the option of building new ones more attractive for those companies willing to expand capacity, said Ricardo Castelo Branco, the ethanol director at Petrobras Biocombustiveis, the biofuels arm of state-run oil company Petrobras. This would represent a change in a trend that has been in place since the 2008 global financial crisis, which caught many mills too indebted in the middle of ambitious expansion programs. The situation left several distressed assets which ended up being bought by deep-pocket groups such as Petrobras in a wave of consolidation in the sector. Branco said the cost of purchasing existing facilities ("brownfields") is the same as that of building new plants from scratch - the difference is that with a new plant, investors have to wait at least two years to get any return.

• CHINA: Rabobank sees 2011/12 imports at 2.5 million tonnes - Sugaronline

  
  Rabobank says China will likely import 2.5 million metric tonnes of sugar in the 2011/12 crop year that began Oct. 1, according to Dow Jones. The world's largest sugar consumer will likely mark a fourth consecutive year of sugar output falling short of domestic demand in the current crop year, it said. China imported 2.1 million tonnes of sugar in the crop year ended Sept. 30, with imports in September alone reaching a monthly record volume of 468,868 tonnes, according to customs data. The projected sugar imports will replenish historically low levels of sugar stocks, which are just slightly more than half the 10-year average at about 1.7 million tonnes, Rabobank data showed. "Late rains in southern China were beneficial for the 2011/12 cane crop, while the 2011/12 harvest area is about 6% higher than the previous season," it said.

• EU issues licences for 700,000 tonnes of 2010/11 out-of-quota exports – FO Lichts

  
  The EU issued licences on December 7 for the export of 700,000 tonnes of out-of-quota sugar, which were approved in April for the 2010/11 (Oct/Sep) marketing year. Applications by EU operators for the export licences were about double the total volume available, so each applicant will receive licences for 51.7% of the volume that they requested, a regulation published in the EU's official journal showed. The EU approved the sugar exports in April, and said the volume was within its annual WTO limit of 1.35 mln tonnes for 2010/11, but gave operators time until the end of 2011 to deliver shipments. The extension of the delivery period has drawn criticism from other producing countries, because it may take physical exports in the 2011/12 season to 2.05 mln tonnes, as the EU has already allowed a total of 1.35 mln of out-of-quota exports for 2011/12.

• AUSTRALIA: More concerns about sugar research funding - Sugaronline

  
  Cane growers have attacked plans to overhaul the industry's research and development arm and centralise its funding, according to the Australian Broadcasting Corp. A recent review commissioned by the Australian Sugar Industry Alliance criticised the performance and a critical shortfall in the funding base of the industry's research arm, the BSES. But the chairman of the Australian Cane Farmers Association, Don Murday, says the move to create a single research organisation represents a huge risk for the industry. He says cane growers are prepared to pay more to maintain the existing research program and it's about time the milling sector matched the commitment.