SUGAR MARKETS

the changing
world of sugar

ABOUT AB SUGAR - the future ‚Äčof sugar

what the future
of sugar means
to us and our businesses

ABOUT AB SUGAR - the future ‚Äčof sugar
ABF AR15 Sugar World Map

Overview

As an international business, we operate in a diverse and continually changing social, political and economic environment with many opportunities and challenges. 

Although we have a global portfolio, we operate with a local heart – working together to do what is right for the location and market. As we evolve to meet the world’s changing needs, it is our role to ensure we use resources responsibly, build strong rural economies and ensure thriving healthy communities.

Our success has been built on continued development and innovation to meet the changing needs of our customers, to improve our operations and to work with our growers to ensure sustainable, efficient agricultural production.

By drawing upon everything we have learnt over many decades as an advanced sugar producer, we continue to embrace innovation and strive to create more from less by working collaboratively across our group and with our stakeholders.

EU Flag

Our vision to be the world’s leading sugar business

In a diverse and continually changing environment with many opportunities and challenges – the final round of changes to the European Union (EU) sugar regime in 2017 is just one example. These changes will see the abolition of production quotas, the removal of minimum beet prices and the elimination of the artificial distinction between sugar sold for food and industrial applications in the EU. 

Furthermore, World Trade Organisation (WTO) export constraints will no longer be applicable to European producers although WTO-controlled import duties for non-preferential sugars into the EU will remain in place. As a consequence, sugar prices in the EU are likely to move more in line with world prices than has previously been the case. 

In such a dynamic market, increased pressure will be placed on the competitiveness of the total EU sugar supply chain. Growers, processors, haulage companies and other key stakeholders will all need to ensure their individual competitiveness in order to maintain the ability of the sugar industry as a whole to compete. 

For further information click here.

The future: EU regime reform and Brexit

The UK European Referendum vote introduces a further dimension to the 2017 EU sugar reform for sugar producers in the EU. 

So, what scenarios are we most likely to face beyond 2017? 

  • suppliers to the European market will need to further improve their efficiency and competitiveness. This will include energy efficiency, process technology and co-product development. Well-targeted and effective investment will be key
  • with inflation in other major world markets outstripping that in the EU, we have already seen EU beet sugar producers improve their position in world league tables for cost of production. With the exception of distortions generated by movements in currency exchange rates it is anticipated that this trend will be maintained and continuing growth in sugar beet productivity will be essential to support these changes. This has already led to EU white sugar yields, expressed on a per hectare basis, exceeding those of Brazil
  • the relative profitability of alternative crops will become even more of a key determinant of production scale in the EU as growers look to maximise total farm profitability
  • EU refiners may need to take a more opportunistic view of refining, for example, by focusing on periods when world sugar prices are sufficiently below EU prices to generate attractive returns
  • global trade flows will adjust to accommodate EU exports and sales into regions outside Europe, some of which may be new markets.
AB Sugar China Azucarera British Sugar Germains Seed Technology Illovo Sugar Group Vivergo Fuelds