Sweet moves by the US & UK in the Middle East

Brazil and Syria and US proceed with sugar refinery project

Resulting from a visit in December 2003 by the Brazilian president Luiz Inácio Lula da Silva to the Middle East,the American company Cargill's ( US$6Bn.TO one of the largest agricultural combines in the world) subsidiary Cargill's Africa subsidiary (40%) in partnership with Brazilian company Cristalsev (10 % plus technical expertise), plus 3 Syrian companies, Assaf Invest, Sugar Invest and Sugar Mezzanine, are set to build a US$150 Mn , 1 Mn tonnes per year sugar refinery in Jandar 30 kmt south of the city of Homs, in Syria. This has interesting political repurcussions in the region.

UK-based corporate finance firm, International Investment Trust, has acted as financial adviser to the project.The curious American Wellington Group is also involved in the project.

The raw sugar will be supplied by Brazil, by Cristalsev, responsible for the sales of sugar from nine mills from the state of São Paulo,worth US$ 200 million, according to forecasts by the Brazilian minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan, when the project was announced.

Land is available and though a start was expected early this year a start date has not yet been finalised.

The demand for sugar is the Middle East is high and rising , between Jan-Nov 2005 Brazil had sugar sales to the region of US$1.2 Bn 22% up on the previous year (US$983Mn)

Syria has a small sugar beet industry and prouces some sugar in bulk. The intention is the plant will distribute finished product to Jordan and Lebanon.

In January Brazil forecast a record cane harvest up 5.7% of 440 Mn. tonnes (417 Mn). Of this, 220 Mn. tonnes will produce 27 Mn. tonnes of sugar. Another 177.9 Mn.tonnes will produce 17 billion litres of alcohol, and the remaining 40 Mn. tonnes will be used for cachaça (spirit typical of Brazil), rapadura (a sweet), seeds and animal food.

Cargill's involvement is related to the thorny problem of Turkey's sugar politics not unrelated to EU entry, itself a viper's nest of financial and industrial interests / subsidies etc.,

Cargill's production in Turkey is restricted to 100,000 tons because of quotas. Having invested $90 million in Turkey, Cargill is unable to use its capacity to the fullest because of the country's sugar beet lobby.

Cargill's new investment is also of interest to Turkey's sugar politics. Experts report that Syria is a major source country for sugar smuggled into Turkey. When Syrian sugar production is increased, it will mean that sugar smuggled into Turkey will also rise. Cargill's production in Turkey is restricted to 100,000 tons because of quotas. Having invested $90 million in Turkey, Cargill is unable to use its capacity to the fullest because of the country's sugar beet lobby.

Fifteen percent of the sugar produced in Turkey is produced privately, the largest share belonging to Cargill (when they took over Cerestar worldwide), and the remaining 85 percent by state-owned Türkşeker Fabrikaları and six privatized partially state-owned sugar factories using sugar beet.(Cargill are involved in hazel nuts as well - 80% of the world's traded crop is harvested in Turkey).

It is claimed that Syria is a major source country for sugar smuggled into Turkey. When Syrian sugar production is increased, the same critics say that sugar smuggling into Turkey will also rise.

UK & Israel proceed with sugar refinery project

Elsewhere in the ME ( In a deal shrouded in secrecy since it was signed in September 2005 ) Tate & Lyle will acquire 65 per cent equity in a new Israeli company, the net assets of which will be £ 8.1m. for a sugar refinery to be designed by Tate & Lyle Process Technology, Tate & Lyles specialist engineering division. Israel’s Gadot Biochemicals will own the remaining 35 percent.

EU sugar reforms, which come into effect on 1 July 2006, and says Stanley Musesengwa, Tate & Lyle chief operating officer. "This investment is another example of how we are reacting positively to changes to the European sugar regime."

"It will enable us to continue serving our customers effectively by replacing our existing European Union exports to Israel."

The EU currently exports 4.5 million tons of sugars a year, including 400,000 tons to Israel. The new regulations will reduce EU sugar exports to 1.3 million tons a year (and costly taxpayer subsidies) . Last October, the price of sugar was less than $300 in the international market. Now it is over $500 per ton. (25 yr high in Feb 2006)Pakistan is experiencing severe shortages and soaring internal prices and more are forecast an inevitable consequence of EU crop reductions and diversion of cane crop to ethanol production as the oil price rises.

Tate and Lyle have a Turkish office, but as their website points out, it doesn't deal with Israel. "(Sales for Middle East (except Israel),Adana Organize sanayi Bolgesi,Yakapinar Adana 01350, Turkey t. +90 (0) 322 355 4077 f. +90 (0) 322 355 4093. " (Was this the reason for the secrecy ?)

Pic ? here's a clue ... Textile polymer ingredient Bio-PDO produced by DuPont Tate & Lyle BioProducts and used by DuPont to produce Sorona® polymer. Sorona® polymers are stain and chlorine resistant with great 'stretch and recovery' and are exceptionally soft to the touch. Fibre made of DuPont™ Sorona® polymer is used in a wide range of textile applications from swimwear to carpets.