IME

Sugar

More than 100 countries produce sugar, 78% of which is made from sugar cane grown primarily in the tropical and sub-tropical zones of the southern hemisphere, and the balance from sugar beet which is grown mainly in the temperate zones of the northern hemisphere. Generally, the costs of producing sugar from sugar cane are lower than those in respect of processing sugar beets. Currently, 69% of the world's sugar is consumed in the countries of origin, whilst the balance is traded on world markets. Because of the residual nature of the world market, the free market price is one of the most volatile of all commodity prices.


Global sugar consumption growth increases by about 2% per annum and in 2007/08 is expected to reach almost 160 million tons.		The top ten sugar producers account for 77% of global production which in 2007/08 is estimated at 169 million tons.


In 2007/08, about 69% of world sugar production is expected to be consumed in the countries of origin, with the balance traded on world markets. Record production in a number of major sugar producing countries has increased overall global export availability.		In recent years, consumption growth has steadily increased in a number of Southern African countries, with the longer-term potential for future gains remaining favourable.

Domestic sugar prices in the South African Customs Union remain substantially below those of some developed nations.
		The most recent independent survey of international sugar production costs covering in excess of 100 sugar producing countries indicated that, of the six countries in which Illovo operates, three are in the top fifteen lowest-cost cane sugar producers in the world, and all six are within the top 25.