Sugar industry facing an uncertain future

LONDON - It's not this year's price crash that haunts the $150 billion sugar industry. It's the fear of worse to come.

After decades of stable demand growth, almost doubling per person since 1960, many shoppers have turned against the cola and candy blamed for an obesity epidemic in the rich world. At the same time, sugar has to compete with cheap syrups increasingly used in processed food.

Demand is rising by some estimates at the slowest since at least the global financial crisis as companies such as Coca-Cola Co., consuming about 14 percent of all sugar traded, and Nestle SA, the world's biggest food company, react to such trends.

Group Sopex and Green Pool Commodity Specialists see growth in 2017-18 below the average two percent a year of the past decade or so. The U.S. Department of Agriculture sees the first drop in demand in a quarter century.

'Growth is not what it's been,” said Tom McNeill, managing director of Green Pool. 'There is undoubtedly a move by global bottlers and by a lot of global food manufacturers to reduce the sugar content in their products.”

Consumption may sink below one percent for a second year in the 2016-2017 season, less than half the average pace in the previous decade, Sopex figures show.

The slowdown may mark a turning point for an industry that's seen near linear growth for half a century on an expanding world population and rising wealth, concentrated most recently in dynamic economies such as China.

Indeed, food giants only are just beginning to respond to noisy calls from customers, lobby groups and lawmakers to cut empty carbs from products.