Refined sugar market tightens

The world's refined sugar market will go into deficit as the European Union becomes a major importer due to market reforms and as India shifts from being a net exporter to importer, a senior analyst said on Monday. The EU, which used to heavily subsidise its sugar trade, is close to the end of a reform process designed to create a fairer global trading regime for the sweetener.
Peter De Klerk, senior analyst with London-based sugar trade house Czarnikow, told the Kingsman Dubai sugar conference that refined, or white, sugar supplies would tighten, with the EU reforms having far-reaching implications for the world market.
"This year's swing in EU exporters (to net importer), overlaid with the withdrawal of India as a major white sugar exporter will see the white sugar market in deficit for the first time in many years," he said in a keynote speech.
India is the world's largest sugar consuming country and swings from being a net exporter to importer depending on the size of its harvests. India is currently a net importer. Middle Eastern refineries were compensating to some extent for the demise of EU white sugar exports to the region, De Klerk said.
"In the Middle East, the two giant refineries, here in Dubai and in Jeddah, will also need to take up the slack that a withdrawal of an average of 370,000 tonnes per annum between 2000 and 2005 implies," he said. "Some substitution with Brazil low quality whites, especially in containers into the Yemen market, has already been seen, but this remains a relatively new trade route."
De Klerk said that when the EU was a net exporter, before the reform process kicked in, the bloc exported around 1.35 million tonnes to the eastern Mediterranean region."This implies that the new regional refineries, that have been established in Syria and Egypt, will need to work up to capacity in order to offset the historic flows from the EU," he said. He added that no new processing facilities had been established in Lebanon. The Kingsman Dubai conference, which has attracted more than 350 leading sugar traders, merchants, analysts and fund managers from around the world, ends on Tuesday.