Sugar demand in emerging economies to expand fast

Dubai: Sugar demand in emerging economies, including the oil-rich states in the Middle East, will continue to expand strongly in the next few years, an industry source said.

"Sugar consumption in developing countries will continue to grow due to increasing per capita income, urbanisation and new food habits, especially in South and South East Asia, the Middle East and Sub-Saharan Africa," said Marcos Jank, president of the United Sugarcane Industry Union (Unica) at the Dubai Sugar Conference.

However, Jank cautioned that India is now fast emerging as a major sugar exporter and is affecting world market prices.

India has reportedly eaten Brazil's market share in some markets such as the Middle East, including the Al Khaleej refinery in Dubai.

Although its sugar production has gone "flat", Jank said Brazil remains the global leader in sugar exports, followed by Thailand, Australia and India.

"India is following Australia more closely. Right now, it's not Brazil that's expanding exports, but India. The European Union has been reducing sugar production and India's production is growing," Jank said.

Concern

He expressed concern that India, with its "distortive" policy instruments such as export subsidies and government intervention on prices, stocks and logistics, is "replacing the European Union on sugar exports".

Subsidies for sugar exports are reportedly giving Indian exporters an unfair advantage in the world market and are harming sugarcane producers in Brazil.

"We have solved the European problem, now we have the Indian problem on export subsidies. It's a pity. We've been fighting for free market for years and years. India is now the most important factor impacting world market prices," Jank pointed out.

Nanda Kumar, India's Department of Food and Public Distribution secretary, however, assured that sugar export subsidies are not a long-term policy of the government.

"We do welcome the suggestion that we should probably look at [subsidies]. It's a point well taken and I would like to assure you that we are seriously addressing the issue," he said, in response to Jank's statements.