Sugar: we're making more and eating less

Sugar: we're making more and eating less

As an economist, CANEGROWERS Head-Economics Warren Males likes numbers. So during the debate about a sugar tax, he's been collecting some numbers which make for some interesting reading.

In the 1980s six sugar refineries in Australia operated under the Commonwealth-State sugar agreement. With an  embargo on imports, all of Australia’s domestic need were filled by these six refineries, which produced around 750kt (thousand tonnes) of refined sugar each year.

While some of that was exported to Pacific Island nations, around 700kt was consumed at home.

Australia’s population in 1985 was 15.76 million. Its easy to do the sums.

At the time,  the Australian Bureau of Statistics (ABS) placed Australia’s per capita sugar consumption at 44 kg per person. That's  much lower than the 52 kg per person the ABS calculated as Australia’s sugar consumption in 1973.

A lot has happened since then. At the end of the 1980s, the sugar agreement was not renewed and the embargo on imports  was replaced with a tariff that was also then removed.

These changes and others led to an increase in competition in  the sugar refining sector. New refineries were established near Grafton and Mackay.

Many of the capital city refineries (Adelaide, Sydney, Brisbane and Perth) closed. The net result however was a slight increase in Australia’s   sugar refining capacity. At their peak, Australian refiners produced around 1.1 million tonnes of sugar.

With the closure of the refinery in Singapore, Australia’s white sugar exports increased to around 250kt with Singapore taking  around 150kt of them.

Australia’s geography and the cost of domestic freight means it is expensive to supply white sugar into Perth from east coast Australia.

So while some white sugar makes its way west, the removal of the tariff  also opened opportunities for distributors to source white sugar from refineries in south-east Asia.

Today, Australia imports some white sugar (around 150kt), it exports white sugar (around 200kt) and our refineries produce around 900kt of white sugar.

This means there is about 850kt of white sugar available for consumption in Australia. Of course, sugar is also imported and exported in sugar-containing food and beverage products.

There are a range of estimates for sugar in this trade. But most, suggest the net impact is no more than 50kt.

What does this all mean? Australia’s annual sugar consumption is now around 900kt for a population of around 24.86 million.

That means per capita sugar consumption is now around 36.2 kg per person and falling.

And of course, this calculation does not take into account food wastage. A portion of the food that's produced never makes it into someone's mouth - it's thrown out because of spoilage or passes its use by date.

This wastage is significant. In a 2011 report prepared for the  Department of Sustainability, Environment, Water, Population and Communities, the increased generation of food  waste was described as a national and global problem.

All in all, its an equation that reveals some inconvenient facts  for those seeking to solely blame sugar for Australia's obesity problem and impose a sugar tax.

by Warren Males, CANEGROWERS Head-Economics
(download the article as it appeared in Australian Canegrower 26 March 2018 edition)