Czarnikow, which three months ago shook up the sugar market
by pegging demand well above market estimates, hardened its stance, saying
consumption growth may remain at higher rates.
Growth in global sugar demand, which average more than 3% in
the five years to 2008, had slowed to 1% three years later – a major factor in
dragging New York futures down from a 30-year high of 36.08 cents a pound
reached in February 2011.
The average growth rate in sugar consumption in 2009-11 was
just 1.3% a year – not much faster than world population growth which is a big
driver of baseline demand.
However, this slowdown may prove a temporary hiccup, caused
by the world economic slowdown and the elevated sugar prices – both of which have
'Trigger of civil
"The global financial crisis was detrimental to consumption
growth rates as economic growth slowed, but in sugar the effect was even more acute
as the market entered a three-year period of production deficits and high
prices," the London-based group said.
"This impacted on supply chains. In North Africa a shortage
in the availability of essential commodities, including sugar, became a trigger
leading to civil disturbances and the events of the Arab Spring."
However, with prices lower, and population growth alone
adding nearly 2m tonnes a year to sugar consumption, "we remain confidence that
the long-term outlook for demand remains positive", Czarnikow said.
"We will see a rebound in growth rates at current lower
This acceleration would appear in fact to imply support to sugar
values, given their low level compared with production costs, although Czarnikow
stopped short of making a price forecast.
Toby Cohen, Czarnikow director said: "With consumption
growth proving robust and the world market moving back towards equilibrium the
market needs to sustain production and cover total production costs as well as
pay a return to shareholders.
"This remains a challenge."
Worst hit regions
The extent of the 2009-11 slowdown in consumption growth had
been evident in particular in Asia, the Middle East and North Africa, the
In Asia, the annual growth fell from a rate of 4.7%, in the
decade up to 2008, to 1.5%.
In the Middle East, growth fell from around 3.6% to less
"Had consumption continued to grow at the rates experienced
from 2000-08 in these two regions alone, consumption in 2013 would today be 11m
tonnes higher than it is today."