global F&A conference Barcelona - sweet success 6 What'sNewS Close to 300 participants, top level speakers from the industry, strong discussions on the issues of our times - trade barriers, HIV in Africa - all were ingredients of RI's annual global F&A conference. For the first time, two events on sugar and sweeteners have taken place in five years - Bangkok in 1996 and now Barcelona in October 2000 - a move reflecting the sector's economie importance and its geopolitical and social impact. What's NewS looks at the key issues confronting the industry through summaries of the presentations and ensuing discussions. But to start, we ask RI's own sugar industry specialists - Roger Bradshaw, Adrian De Young and Simon Tyler - to explain just what's happening in sugar and sweeteners. Issue 7 November 2000 WNS: Will the current top five producers/ exporters remain the same in the near term? Roger Bradshaw (RB): Australia has the ad- vantage of being very competitive while still having capacity. Brazil is obviously a winner - don't forget it has the capacity to expand production, almost at will. Clésio Balbo of Brazil's Copersucar points out that 1999 was a peak year for the industry there, but if the niarket moves up, people will be encouraged to grow more cane. The Brazilians can produce more, it's more a function of price than capacity. Adrian De Young (ADY): And with so much land, acreage is not a constraint. Simon Tyler (ST): Australia is also one of the most efficiënt producers, and like the Brazilians, whose business is export-ori- ented, the infrastructure is in place to han- dle the volumes. But I also see South Africa joining the top group, which al- readv includes the EU. RB: Thailand was certainly up and coming and remains one of the top producers, but as Jonathan Kingsman remarks in his presentation, it's obviously been affected by economie turmoil, retarding their progress in the sugar industry. WNS: Recovery is ongo- ing in Thailand, but other countries are proving less able to confront economie set backs. rationalization as the future, whereas John Russell at lllovo Sugar in South Africa is talking about increasing the nuntber of small growers to feed the sector in south- ern Africa. ADY: They are also confronting epidemie HIV in southern Africa, which is affecting economie development. What strikes me in Russell's presentation is his integration of community and so cial aspectsinto the fabric of the industry in his region. These have always been key factors in this busi ness. Just look at Dhruv Sawhney's fig- ure of 45 million peo ple dependent 011 sugar in India - it's clear that employment is another political and social component. RB: India is certainly a country to watch - for more than this reason alone. 'Sugar or HFCS?'asks Stefano Meloni, President ofEridania Beghin Say ST: This first section of the conference goes into some of the real concerns in the sugar industry. By sketching the current state of the Russian industry, where demand con- tinues to increase, Igor Khoudokormov of Russia's Prodimex describes what happens when an industry loses the confidence of the financial world. RB: Th ere cornes a point in time when the financial, political, and economie risks be- come too great. I.ook at the Russian in dustry - it's on hold because no one has the confidence to move it forward. ADY: Problems in the US are very different. While it might seem a regional issue, it ac- tually reflects conditions that are so preva lent in our industry today. Luis Fernandez of Florida Crystals puts it succinctly when he talks about the NAFTA versus global- ization concept. Are the two mutually ex- clusive? ST: What's interesting about Fernandez' approach is that he's advocating WNS: With new coun tries emerging as po- tential players in the global market, and China poised to join the WTO, who will be the survivors in the industry? RB: Whether production can be sustained by many growers without the benefit of supported prices and the tariff barriers that currently exist is very much a func tion of the politics, especially in regard to WTO and also the regional political initia- tives you see taking shape around the world. China is another factor. It has a huge sugar industry, but isn't exporting. Potentially, it could become a significant importer in 200 I, and as Stefano Meloni of Eridania Beghin Say explains, it is the only emerging market with a big synthetic sweeteners business. But to answer the question: basieally, the big countries are getting bigger and the smaller or less efficiënt players are consoli- dating. The other side of the equation - the end-user side - is increasingly frag- mented. More and more buyers, more people are seeing opportunities in the sugar market.

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