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ProSweets 2013 Cologne

Sugar outlook positive despite impending EU quota extension - ISO

By Oliver Nieburg+

07-Feb-2013
Last updated on 13-Feb-2013 at 12:13 GMT

The International Sugar Organization (ISO) has said that even if the EU extends sugar quotas to 2020 it will have little negative impact on the world sugar market as stocks are at a surplus and a bumper crop is due from Brazil.

Leonardo Bichara Rocha, senior economist at the International Sugar Organization, spoke to ConfectioneryNews.com after his presentation on the global sugar market at the ProSweets Conference on Ingredients in Cologne, Germany last week.

Surplus even with quota

He said that there was currently a large statistical surplus on the world market and global sugar prices would fall this year.

the EU will finally decide by June this year, whether to extend sugar quotas in the EU to 2020 or to abolish the regime at the earliest opportunity by 2015.

Procurement heads for Mondelēz International and Nestlé have said that the quotas are causing significant supply constraints leading to sky-high prices.

However, Rocha said that the impact on global sugar will be minimal and even if the quotas run until 2020 there will be enough sugar on the EU market for the next seven years.

He added that global supplies would be boosted by a record crop expected in the largest sugar-producing nation Brazil.

Evolution of consumption

Asked how demand for sugar had evolved, Rocha said that Asia was now the “engine of consumption growth”.

He said that while consumption was stalling in the EU and America, 60% of sugar between now and 2020 will be consumed in Asia.

The average level of sugar consumption globally is 24 kilos, while in China it’s only 10 to 11 kilos. “There’s a lot to catch up on,” said Rocha.

Threat from sugar alternatives?

The economist said he saw no real threat from other sweeteners and expected sugar to retain its 85% share of the global sweeteners markets.

He said that sweeteners like stevia, the talking point of ProSweets 2012, remain “niche markets” and will grow as compliments to the sugar market, not threats.

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