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'Peak sugar' poses problem for producers

Wednesday, May 31, 2017 - 01:33

Demand for sugar over the past ten years has grown at around two percent per year. But one analyst group says growth could slow to about half that rate. Julian Satterthwaite reports on how a more health-conscious global population is impacting the industry.

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The world might be losing its sweet tooth. And that's bad news for anyone who grows or sells sugar. For the past decade demand for the sweetener has grown at about two percent per year. But now analyst group Platts Kingsman say growth could slow to about half that rate. (SOUNDBITE) (English) JASPER LAWLER, SENIOR MARKET ANALYST, LONDON CAPITAL GROUP, SAYING: "One of the consistently messages is that sugar is not good for your health and I think that's being understood by consumers. And finally companies are reacting to that so the big fast food producers the soft drinks producers are reacting to consumer demand and some government laws in some places." At least 17 countries and a number of US cities now put extra tax on sugary drinks. 11 more nations are considering something similar. In the past, booming demand in the developing world might have made up for that. As people get richer, they tend to eat more sugar. But now that's changing too. Sugar sales in India - the world's biggest consumer - are set to fall by one million tonnes this season according to forecasters. Local factors at play there, including an end to sugar subsidies for poor families. And it's a similar story in other developing markets. Does all this mean the world is about to hit peak sugar? It's too early to say that for sure. But it's a headache for the industry even so. With production exceeding demand, prices for their product look likely to fall. Like many of their customers, that could leave sugar firms with some slimming down to do.

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'Peak sugar' poses problem for producers

Wednesday, May 31, 2017 - 01:33