global F&A conference Export dispute Big scope Q&A Blurred boundaries Community focus Q&A 8 What'sNewS Issue 7 November 2000 Russian government has imposed a tar- iff quota on imports to raise prices on the domestic market, tlius stimulating growth in home production. (We'll be reporting on what RI is doing in Russia next issue.) Next up was Florida Crystals' CFO Luis Fernandez. America's proverhial sweet tooth gave hint a backdrop to describe the rationalization of the industry in the US since the early 1980s. But the main thrust of his presentation is whether globaliza- tion is compatible with the kind of re- gional free trade agreements that are be- conting a feature on most maps. The crisis in the US' sugar policy and the dispute with NAFTA partner Mexico on how much the latter can export northwards over the next seven years forrn classic ex- amples of issues that can arise. Fernandez' point was that the dispute between the US and Mexico relates primarily to the transi- tion period to a common market and bor der which runs front 2001 to 2008. This leads hint to surmise that, in view of the dispute, reaching acceptable transition pe- riods may be as difficult as reaching clo- sure on the objectives of a free trade agreement. Moving on to globalization, Fernandez pointed out that even where trade liberal- ization and agreements have been reached, disputes appear to continue regarding sugar. 'You have to ask why,' he said, not- ing that many complex issues and interests are at work in attempts at globalizing in dustry. These include food security, em- ployment, rural policies, tradition and his- tory, and energy policies. The fact that all these factors are at work in the sugar in dustry was more than confirmed by Dhruv Sawhney, chairman of India's Triveni En gineering Industries. Presenting a study of the Indian sugar industry compiled specially for the conference (you can get a copy from Maarten van den Bergh at Marketing RI), the story of India's potential is staggering in both size and scope. Last year, India produced around I 8.2 million tonnes, consumed 15.5 mil- lion tonnes and used 350 MW of co-gen- erated power. One of the main points of his presentation focused on India's potential as an exporter. Participants were quick to piek up on Fer- nandez's reference to crisis in the US sugar policy. In recent months, no less than I million surplus tonnes have been pur- chased by the US government from grow- ers. The question of whether there would be another million next season was al- most inevitable. Coupled with the query on whether US sugar production would survive NAFTA and WTO, the response from Fernandez was measured and even tactful. Reiterating that US production was not only world- class, but also highly efficiënt, he argued that the industry would survive in any market place. 'Basically,' he said, 'what we need is a little border control until real globaliza tion arrivés.' The issue of foreign investment into In dia arose for Dhruv Sawhney. How diffi cult is it to attract funding from else- where? Sawhney believes there are two factors which would impact negatively on foreign investment. One is the risk factor involved in dealing with a huge number of growers. The second is strong government intervention, which continues to exist in India, although liberalization is ongoing. Infrastructure is also a huge problem for the subcontinent. 'Sugar or HFCS, quo vadis?' was Eridania Beghin Say president Stefano Meloni's topic. Running through the HFCS share in emerging markets, he pointed out that China is the only one with a large syn- thetic sweetener sector. 'It would seem,' he said, 'that any country which can produce Beautiful reception: site of the confer ence dinner, Gaudi's Casa Batlló sugar will opt for that route before focus ing on building an HFCS business. At the same time, a greater WTO would make it harder on emerging markets to protect a budding sugar industry.' Responding to questions on expansion of the EU, he noted that the prospective new members had been preparing for entry for quite a long time. 'One criteria has been to de- velop quasi-quotas, as they try - quite rightly - to build maximum possible pro duction, thus achieving top quotas. Some coun- tries have already intro- duced these quasi-quo- tas; as a system, it appears to be working well for them.' The inroads being made by alternative sweeteners was one of Jonathan Kingsman's points. Al though use is increasing, the CEO of Kingsman Commodities argued that sugar consumption con tinues to grow and with it world trade. Kingsman also argues that the dis- tinction between traders and banks will blur even further and that the in- formation revolution will hit players at their weak- est, though usually most profitable point. From the world in general, to a specific re- gion, as John Russell of Illova Sugar ex- plored both the trouble and the potential of southern Africa. The importance of em- ployment, but perhaps more crucially of land redistribution, means southern African players are moving away from the notion of rationalization so prevalent in, for example, the US. Aids is a true disaster in southern Africa. 'It is terrible in human terms,' Russell said, 'but also for eco nomie development. We have to make continuous investment in training while remaining globally competitive.' Is the situation in Zimbabwe, where white farmers are being dispossessed of land,

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