Regional Market Outlook On Organic Sugar

1 percent of total world sugar production is organic , as the consumption across globe is very limited. 74 percent of total organic sugar production is seen in South America and Western Europe and the US are the two leading consumers organic sugar. 

Organic Sugar- Global Market Overview

  • Global sugar production remains approximately at 180 million tons  in which organic sugar contribute nearly 3,20,000 tons.  Brazil is the major organic sugar producer  and produces 1,35,000 tons of organic sugar from cane
  • Paraguay is the second largest organic sugar manufacturer in the world with ~ 1,00,000 tons. Other producers include Argentina, Colombia, India and Thailand
  • Consumption of organic sugar across world is small and the international trade is between 0.2% and 0.6% of total sugar trade.  Major markets for organic sugar are North America and Western Europe
  • European sugar market is around 1,20,000 tones including the imports from other countries and production  within Europe. 85-90 percent  of sugar imported are cane-derived
  • Germany, Austria and Romania are the three countries that produce organic sugar within EU

Organic Sugar – European Market

Out of the total 1,20,000 tons of organic sugar consumed in EU, ~ 10%  is estimated to be from sugar beet and  the rest is produced from cane which is imported from other countries under fairtrade.  In total, 0.4 percent of Germany’s sugar beet  acreage  is organic. Similarly, 1.4 percent of total beet is organic in Austria

  • Germany, Austria and Romania are the three countries that cultivate organic sugar beet in Europe. All the farmers cultivating organic beet are under contract farming system
  • Bavaria, Baden-Wuttemberg, North Rhine Westphalia, Saxony and lower saxony are the major regions that cultivate organic beet in Germany. Southern Germany supply organic beet to Switzerland
  • Lower Austria and Burgenland are the two regions in Austria  under contract farming of sugar beet. Processing of these beet are done in Czech republic
  • Sudzucker is the only company that produces organic sugar from beet.  Its organic sugar producing factories are located in Germany, Austria (Agrana) and Switzerland
  • Nordzucker currently imports and refine  organic cane sugar through f trade policy and sells to the end consumers. The company is expected to produce organic sugar domestically from beet from 2018 onwards.  At present, it is in contract with farmers to produce organic beet

Organic Sugar – Price Analysis

Organic sugar produced in Europe by Sudzucker  AG is approximately 18-20 percent higher than the price of conventional sugar, whereas, organic sugar from cane  imported from  countries like Paraguay trends 25-30 percent higher than the conventional sugar price.  However, organic sugar follows the same trend of conventional sugar.

  • Organic sugar in Europe follows the EU conventional sugar price trend  and is  ~20-30 percent higher than the conventional sugar price.  Sugar from sugar beet and sugar cane have approximately a difference of 5-10 percent
  • Sudzucker in Germany, Agrana in Austria and Swiss sugar limited in Switzerland are the major companies producing organic sugar in Europe. In 2018, Nordzucker is also expected to produce organic sugar from beet. Tate and Lyle in United Kingdom is a refiner of imported raw cane sugar in Europe
  • Rise in world sugar price has increased the EU sugar price since last year October. However, this price trend is expected to reverse from September 2017 after removal of EU sugar production quota which is expected to impact the price of organic sugar as well
  • Decrease in price by 3-4% can be expected after September and imports of organic cane sugar is expected to remain constant until 2018/19 season  as current demand for organic sugar is higher than its supply
  • After 2018/19, slight decrease in organic sugar imports can be witnessed because of the increase in supply from Nordzucker AG