London, 31 October 2010

Czarnikow, one of the world’s oldest sugar traders, today publishes its report Sugar in 2030: How the World will Meet an Extra 50% Demand. The paper analyses consumption and production trends over the next 20 years, as rising wealth in emerging markets leads to greater demand and further pressure to increase production globally.

Key findings:

• With global consumption forecast to rise by more than 50% to almost 260m mtrv by 2030, world production needs to find a further 90m mtrv over the next 20 years.

• Few countries have the ability to increase planted area and as a consequence productivity growth and increased trade will be required to meet demand.

• Our analysis indicates that improvements in productivity, and regulatory change outside Brazil could result in growth of 45m mtrv. This therefore means that the world market will demand a further 45m mtrv of supply, primarily from Brazil.

• These changes could see the world market almost doubling in size over the next twenty years with the balance of trade in sugar demonstrating an increase West to East flow.

• Asia will remain the biggest consumer of sugar, increasing its share of total consumption from around 40% in 2010, to 49% in 2030.

• India’s consumption will nearly double over the next 20 years, and Chinese consumption will overtake EU consumption in around 2014.

• By 2030, it is forecast that India and China will respectively constitute 17.6% and 14.7%, of total global consumption.

• Total consumption in Europe is expected to remain stable over the next 20 years.

• Africa will begin to emerge as a major consumer, increasing its contribution to global consumption from 10% to 13% in 2030, with particularly strong growth in several countries as a result of high rates of population and GDP growth.

• The sugar industry is becoming more concentrated; the 10 biggest suppliers account for 60% of production and exports.

• Brazil alone accounts for 60% global exports; its production has risen 355% over two decades.

• EU production has been reduced by around 17% during the past decade following the reform of the sugar regime, turning it into a net importer.

• Brazil, the US, the EU, Russia, India and China are the principal countries on which the future of the sugar market will be shaped.

Toby Cohen, head of analysis at Czarnikow, said: “Our paper clearly shows that over the next twenty years global demand for sugar will soar in line with increasing affluence among the world’s developing nations. To meet this demand there will need to be investment in land, productivity and infrastructure to support the growing market. We have seen significant changes over the past twenty years and we believe that the next twenty years will be every bit as challenging.”

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