Organic, Fairtrade and specialty sugars for much of the past decade have seen fast growing niche markets, albeit together they are thought to presently account for less than 0.5% of world sugar consumption and production. With these niche sugars reputedly attracting sometimes significant pricing premiums over conventional sugar, and with ongoing strong fundamentals expected to support continued growth in demand for organic products in key markets, can offtake of niche sugars keep growing at strong rates? There is already evidence of a slow-down. Annual growth in global offtake of organic sugar has slowed to around 4% over recent years, a far cry from the 25% year-on-year increases seen earlier. Several organic sugar producers in Central and South America are in financial difficulty or have stopped production whilst others have chosen to pare back output in response to lower pricing. Even so, there is one major investment in organic sugar production underway in Mozambique for which the proponents cite continuing attractive pricing premiums in both the EU and the US, as well as a positive demand outlook. Fairtrade sales in the UK – the largest Fairtrade market by far – fell in 2014, the first fall in the 20 year history of the Fairtrade Foundation. Established producers of specialty sugars, shipped mainly to the EU and the US, have been hit by competition from direct consumption raw sugar – marketed as a specialty sugar - mainly entering under free trade agreements. Looking ahead, can niche sugar markets escape the fast-growing backlash against sugar and its alleged association with obesity, diabetes and tooth decay? On the supply side, have commercial production incentives been dented by the significant downtrend in world prices for conventional sugar since 2012 and more recently much lower EU prices? Can the traditional specialty sugar producers grow markets in a much more competitive environment where lower value direct consumption raw sugars eat away at market share and pricing? This study provides perspectives on such issues by investigating the markets for organic, Fairtrade and specialty sugars with a view to better understanding recent market developments at the global, regional and country levels. Key markets and suppliers are identified and examined. Data are also collated on production, exports and price premiums.
Introduction 1. Organic Sugar Organic Product Markets The Organic Sugar Market EU US Others Supply Availability Organic Sugar Producers South America North and Central America, the Caribbean Asia EU Africa New Investment in Production Capacity 2. Fairtrade Sugar Sales The UK Market Suppliers Top Origins Others 3. Specialty Sugars Market Size and Major Players EU US Major Producers Mauritius EU US World Market Supply, Storage and Delivery Arrangements SADC Sugar Agreement COMESA and Brown Sugar Malawi Others Direct Consumption Raws Non-Centrifugal Sugar – a Specialty Sugar? Labelling Confusion in the US 4. Price Premiums Conclusions Appendix A: Organic Sugarcane Area and Production by Country 2008-2013 Appendix B: Current Suppliers of Fairtrade Sugar