Home' Trinidad and Tobago Guardian : May 25th 2017 Contents MAY 25 • 2017 guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG21
'War on sugar' takes toll
The "war on sugar" being
waged by governments and
consumers to combat public
health emergencies like di-
abetes is slowing growth in
global demand, which along
with other factors could signal a fundamental
shift in consumption ahead.
Consumption may grow at its slowest pace
in seven years in 2017/18, according to analyst
group Platts Kingsman. It forecasts a rise of
1.04 per cent, nearly half the average growth of
about 2.0 per cent per year over the last decade.
"Consumption is generally stagnating in
developed countries," Tom McNeill, director
at commodity analyst group Green Pool, told
Falling consumption in more health-con-
scious markets has been exacerbated by
higher prices and the use of alternatives like
high-fructose corn syrup in developing coun-
tries that might otherwise have made up the
Combined with weaker demand from food
and beverage makers globally, this could repre-
sent a "step-change lower"---or a fundamen-
tal shift---in global consumption, according to
Tropical Research Services.
"So, it may be that the real long-term
'trend' rate of global sugar demand growth has
changed and is now lower," the group said in
a May 7 report.
At least 17 countries and a number of US
cities have added an extra tax on sweetened
beverages. Another 11 nations are implement-
ing or considering similar levies.
Many are going further: France has coupled
a tax with measures like banning vending ma-
chines in schools. Chile last year introduced
black stop-sign warning labels on foods high
in sugar, salt and fat.
Mexico is another example. With one in
three adults in the country affected by obe-
sity, the country slapped a levy on sweetened
soft drinks in 2014.
Although the impact on health will take years
to assess, early data shows consumption of soft
drinks in Mexico has fallen by 12 per cent since
the tax was introduced.
"There is an increasing understanding for
the need to control intake of free sugars, in
public policy and in culture in general," said
Francesco Branca, director of nutrition for
health and development at the World Health
"With obesity and diabetes very quickly
spreading, they are trying to do something
about it early on."
The slowing pace of growth globally is add-
ing to worries the world sugar market is headed
for a surplus in 2017/18, after two consecutive
It could also curtail ambitious plans by the
European Union to sharply boost output in
2017/18 in an effort to again become a net
exporter, after it ends subsidies and caps on
exports in October.
India, China and Brazil
High-income countries like Norway and
Canada are already seeing a decline in sugar
consumption, Euromonitor figures shows.
Now the appetites of developing markets,
whose rapid population growth was expected to
drive future growth, also appear to be waning.
Sugar sales in India, the world's biggest
consumer, are set to fall by roughly one mil-
lion tonnes this season, the Indian Sugar Mills
Association (ISMA) estimates, due to higher
domestic prices and a cash crunch that fol-
lowed last year's demonetisation of high-value
The government's decision earlier this year
to abolish a sugar subsidy for poor families
also dented consumption.
ISMA expects consumption to rebound next
year as production in the country normalises
and domestic prices come down, but analysts
say long-term growth remains uncertain as
the government mulls higher taxes and stricter
labelling on sugary foods.
"If India also jumps on the bandwagon with
such a levy, as the world's biggest sugar con-
sumer, this could be felt in global growth," said
Stefan Uhlenbrock, senior analyst at FO Licht.
Sugar demand also seems to be stagnating in
China, the second biggest consuming country,
as cheaper sweeteners like high-fructose corn
syrup (HFCS) grow in popularity.
Chinese beet and cane farmers rely on state
support to offset steep production costs. Im-
ports, meanwhile, are subject to hefty duties
meant to protect the industry, with an addi-
tional tariff introduced just this week.
As a result, domestic sugar prices are around
double those on the world market. This, cou-
pled with an abundance of cheap corn, has
made HFCS highly competitive.
The USDA last month highlighted the decline
in Chinese sugar demand when it slashed its
estimates for consumption in that country for
2015/16 and 2016/17 by roughly 10 per cent
and signalled more modest growth than pre-
"People in China are still eating ice cream
and drinking soft drinks," said John Stansfield,
analyst at commodity trader Group Sopex.
"It's just the fact that these products are now
increasingly made from corn syrup rather than
Brazil, the world's third largest consuming
nation, has also seen demand growth slow over
the last three years as an enduring recession
slashed the incomes of many Brazilians. Con-
sumption was growing at roughly 2-3 per cent
over the previous decade.
Soda and confectionary
Manufacturers seem to think the anti-sugar
movement is here to stay, and many food and
beverage companies are pre-emptively refor-
mulating their products as a result.
Coca-Cola has committed to reducing sugar
in its drinks, with more than 200 reformulation
PepsiCo also said that by 2025 at least
two-thirds of its drinks globally will have
100 calories or fewer from added sugar per
Nestle said in 2016 it is developing tech-
nology to reduce sugar in some confectionary
products by up to 40 per cent without affecting
"Globally, sugar is in the spotlight," said Sara
Petersson, nutrition analyst at Euromonitor.
"The regulations are increasing with time. And
if they're being smart, they're going to tackle
this in advance."
Asia, Brazil struggle to make up shortfall
FILE PHOTO: A worker checks the flow of sugar inside the Gandavi sugar factory, 165 km (102
miles) south of Ahmedabad, India, March 26, 2012.
The Gran Hotel Manzana, a part of the
Swiss group Kempinski Hotels, opened
its doors here on Monday, become the
Spanish speaking Caribbean island's
first ultra luxury hotel.
The five-star hotel with rates of up
to US$2,500 per night, features 246
rooms, four bars, two restaurants and
a rooftop infinity pool. The Europe-
an-style building first opened in 1917,
before undergoing a complete renova-
"We appreciate hidden gems and this
matches our philosophy," Kempinski
director Xavier Destribats told Cuban
In order to deliver the project in time,
the Cuban government brought in hun-
dreds of qualified workers from India.
The opening of this hotel is yet an-
other step in Cuba's growing tourist in-
dustry. Last year, international visitors
to Cuba last year rose by 13.9 per cent
to a record four million, second only to
the Dominican Republic while visitors
to the Caribbean region as a whole in
2016 increased just 2.4 per cent.
Cuban tourism officials say they are
expecting another record year in 2017.
Links Archive May 24th 2017 May 26th 2017 Navigation Previous Page Next Page