Sugaronline Editorial - Who’s afraid of the big bad wolf? By Meghan Sapp
Published: 11/03/2017, 12:02:00 PM
Isoglucose may be just as scary for the European sugar industry as it always feared it would be.
Since the beginning—or at least the beginning of the end of sugar quotas—the idea of unleashing isoglucose production and what the impact might be on the sugar market caused fear across the entire European sugar industry. Everyone seemed worried about the potential competition from isoglucose, how it would impact demand, and of course, how it would push down prices.
It would appear the industry was completely right to be worried for one single reason: flexibility.
Take potatoes, maize or wheat and produce modified starches, native starches, and ethanol, or add in hydrogen through a hydrolysis process and get polyols, glucose fructose syrups and isoglucose, dextrose, maltodextrins and hydrolysates. When it comes to the bioeconomy, circular economy and the biorefinery model, starch producers are already miles ahead of the game.
And sugarbeet is just getting started.
The European sugarbeet industry has fought tooth and nail against every raw sugar import quota the European Commission tried to give away during trade negotiations for the mere reason that sugarcane can be sugar, ethanol, electricity, paper or a whole host of other things in mills that already exist and in most cases have already amortised with lower production costs. It’s difficult for the sugarbeet industry to compete against that and so it does its best to keep the market closed to imports.
But isogluclose and starch are not scary foreigners from far away lands that provide, in some cases, insurmountable competition. These are European industries buying feedstock from European farmers. In many cases, they may be even be sugarbeet farmers who are using potatoes, maize or wheat in rotation with beet. The enemy, as it were, is within.
It’s clear that the European starch industry isn’t going to convert into some gigantic monster that will steal sugar’s market share—at least not overnight. Quotas kept isoglucose production to about 4% of European sugar demand, and the starch industry is looking to grow that up to 18% in the medium-term. The question of where that additional production will come from, and where the market for that isoglucose may be is a difficult algorhithm to figure out because it will depend on factors from crop prices to consumer preferences, and from raw sugar imports to cereal surpluses.
Just because the answer isn’t black and white or the future difficult to predict doesn’t mean the competition isn’t there. In fact, it may be scarier because there are so many variables that could change the market landscape. And that’s before taking into consideration people are eating less sugar than before.
What it means is that beet processors must work double-time to increase their competitiveness and evolve towards the biorefinery model even faster. Sugar, yes, ethanol, yes, biogas, most definitely, but green chemicals, energy intermediates, all of it will be necessary to compete with the flexibility of sugarcane mills and starch producers. Innovate, evolve, or perish, it’s as simple as that.