Efficient sugar beet producers can profit from deregulation

The UK sugar industry needs to start preparing for the deregulation of the European market, AB Sugar CEO Mark Carr told the Sentry conference.

Mr Carr said greater price volatility and closer links to world sugar prices were likely when quotas and minimum beet prices were abolished in 2017, at least until global trade flows adjusted.

But efficient UK producers could profit, with global sugar consumption predicted to grow between 2.5-3.5m tonnes a year in the medium term, and large numbers of struggling mills in cane-producing regions such as Brazil and India, he said.

“We need to start preparing for this now as we did in 2004,” Mr Carr said.

“I think it’s more crucial than ever that we work together as an industry to face up to these challenges in the most effective way.

“While beet prices need to be competitive, they also have to be competitive for our growers to grow the crop.

“Our hope is that we are able to invest more in the next four years than we have in the past four years, to make sure our core is maintained.”

Mr Carr also described AB Sugar’s operations in Africa and China. In Africa, the company has a 51% share in IIlovo, Africa’s biggest sugar cane producer, and carries out development projects, such as setting up 24 primary care clinics and four hospitals. AB Sugar has nine factories in China, with 900,000t of processing capacity, and is fourth in the country’s league table of sugar producers.

The company now has 41 sugar-producing sites around the world, with five million tonnes of capacity.

“Our aim throughout has been to be fully competitive with the best in the world by 2020 and we believe we are already on course for that,” Mr Carr said.

See also: Sugar beet growers can claim back EU cash