508 words / 2.5 minute reading time

• Global sugar consumption will fall by nearly 2m tonnes (1%) this year compared to 2019, due to coronavirus lockdowns.
• This means sugar consumption per capita will also fall.
• Consumption will not recover fully until life can return to normal in affected countries; at the moment this looks like being in 2021 at the earliest.

Total Consumption Falls  

• We expect global sugar consumption to fall by 2m tonnes this season.
• This is the first time we’ve seen a year-on-year sugar consumption decline since 1980, when raw sugar prices hit 45c/lb.

• This is a reversal of the recent trend, where consumption was growing in line with population, by 1% every year.

• We have reduced our consumption estimates for countries where lockdown measures are in place by up to 5% for the year.
• However, sugar consumption is hard to forecast accurately so we will continue to adjust our estimates as we receive more information.
• We believe the decrease of out-of-home sugar consumption (in bars, restaurants, theatres, etc.) will be larger than the increase of in-home sugar consumption.
• Soft drink sales have been particularly affected by the abrupt end to social gatherings outside the home.

Coca Cola Report Sales Volumes are Down 25% in April

• At this early stage, we forecast sugar consumption to rebound next season.
• However, we think it will fall short of the pre-coronavirus 1% growth per year trend line.

• For everything to return to ‘normal’ in our pre-coronavirus lives, there needs to be some form of herd immunity, either because enough people have caught the virus, a safe and effective vaccine has been developed, or because the virus has disappeared.
• It seems this won’t happen in 2020 (or perhaps even in 2021) and the effect of the virus on the world’s economy will be profound for the coming months and years.
• Until then, it is unlikely that people will be happy to visit pubs, bars, cafes, restaurants and coffee shops in the same way they did before.
• Many premises may operate on takeaway-only basis.
• Others will have a reduced capacity so they can offer better distancing measures for staff and customers alike.
• We will probably see similar effects at concerts, cinemas, sporting events, festivals and theatres.
• Footfall is likely to be lower as consumers stay away to avoid the risk of infection too.

Scenes From the Past

• This means the drop in out-of-home food and beverage consumption we’ve seen in countries under lockdown will continue even if lockdown is lifted.

2019/20 Still Faces a Large Production Deficit

• Despite the decline, sugar consumption will still exceed production by 7m tonnes in the 2019/20 season.
• This is largely because of cane crop shortfalls in India and Thailand.
• This deficit is well-known around the sugar market and we think is already priced in with raw sugar close to 10c/lb.

• Stay up-to-date with all these changes using the Balance Sheet Changes tool in the Interactive Data Section.