LONDON: Sugar refiners in the Middle East and North Africa are already faced with too much capacity and the expected emergence of the European Union as a net exporter poses a further challenge, the head of one of the world’s largest refineries said on Tuesday.
“The competition will be more and more challenging in the world market especially with European beet sugar coming on board,” Jamal Al Ghurair, managing director of Dubai-based Al Khaleej said at a seminar organised by the International Sugar Organisation.
The lifting of production quotas in the European Union next year is expected to result in the bloc’s emergence as a net exporter, intensifying competition in the refined sugar market.
Al Ghurair said there were also up to three refinery projects expected to be built in the next three to four years in the region.
“So in my opinion, the Middle East in general and North Africa — there is overcapacity by at least two-to-one,” he said.
“This is a challenge for refineries in the region.” Al Ghurair said the company’s decision to make a record delivery of more than 400,000 tonnes against ICE’s white sugar futures contract earlier this month reflected a lack of demand following a rise in global prices.
“What you do when you can’t find a market for your sugar, the best thing to do is to say thank you very much and deliver to the exchange,” he said.
Markets like Iraq were traditionally big buyers of Al Khaleej sugar. When asked, he told Reuters separately, Iraq was “gone now”.
Al Ghurair said Al Khaleej had already started to load the sugar it tendered against the futures market.