By CAROL RYAN DUMAS
Global sugar consumption is projected to increase from 166 million tons to 203 million tons in the next seven years, according to a report released this week by Rabobank's food and agribusiness research and advisor team.
Asia will lead the growth, increasing its consumption from 75 million tons to 97 million tons and growing 2.9 percent annually. But Rabobank expects Africa to have the greatest upward trend, growing by 3.4 percent annually.
"The Asian region is expected to remain the powerhouse of global sugar consumption and imports," said Andy Duff, Rabobank's global strategist for sugar.
Driving the consumption are increasing incomes and urbanization in China and Thailand, population growth and increasing disposable incomes in Indonesia and increasing incomes in India.
Local production in those key Asian countries is also projected to increase strongly, Duff said.
Growing population, increasing real incomes and greater urbanization will drive the growth in Africa, Rabobank reported.
Asia is projected to maintain its dominant share of global sugar imports, while South America's share of imports is expected to grow. Europe's sugar imports are expected to decline slightly due to increasing production in Russia and the Ukraine.
Rabobank expects Brazil, Thailand and Argentina to remain the world's top three exporters, with each increasing their share of exports.
The growth of sugar production and exports from Brazil, the world's largest sugar exporter, is expected to slow. Brazil's sugar exports over the last 10 years grew from 25 percent of the global market to 46 percent. The country's share of the market is expected to grow only 4 percent to 50 percent of the market by 2020.
Global sugar production is expected to increase from about 180 million tons to 204 million tons by 2020, just marginally above the projected consumption.
In the U.S., sugar production is expected to remain steady at between 7.8 million tons and 8 million tons.
Rabobank projects U.S. per capita consumption of sweeteners to decline, with much of the decline due to less consumption of high fructose corn syrup due to the continued erosion of non-diet soft drink sales.
A growing U.S. population, however, will more than make up for the per-capita decline in consumption. Total U.S. sugar consumption is expected to rise 8 percent from 10.4 million tons to 11.2 million tons.
U.S. sugar imports are expected to rise from 2.8 million tons to 3.2 million tons.
Rabobank's prediction of a 37 million ton increase in global demand for sugar over the next seven years raises the question of where all the additional sugar might be produced, said Jack Roney, director of economics and policy analysis for the American Sugar Alliance.
Government policies play a huge role in foreign sugar production, especially for some of the biggest players, such as Brazil, India and Thailand. That's why it is important to maintain U.S. sugar policy until foreign subsidies are effectively addressed, he said.
U.S. sugar policy remained intact in the Senate-passed version of the farm bill, but the U.S. sugar industry faces a challenge in the House of Representatives, where a potential amendment to the farm bill would eliminate or reduce U.S. sugar policy.
"With the longer-term potential for global sugar shortage, dismantling U.S. sugar policy, and the U.S. sugar industry, would be short-sighted, foolish, and a danger to consumers in the United States and abroad," Roney said.