(Corrects to show Tate & Lyle Plc is an owner of Hungrana.
Removes reference to ASR Group)
* Hungary, Romania, Bulgaria seen as key isoglucose origins
* Rabobank sees output up to 1-2 million tonnes/year
By David Brough
LONDON, Aug 15 Cereal-based sweetener output
could surge in the cereal- and starch-rich but sugar-poor
countries of Eastern Europe after EU sugar production quotas are
lifted in 2017.
Output of isoglucose, also known as high-fructose corn syrup
(HFCS), is now subject to a production quota of about 700,000
tonnes a year, or some 4 percent of the EU sweeteners market.
Most production in the 28-nation European Union currently
takes place in eastern countries.
Rabobank said EU isoglucose output could jump to between 1
million and 2 million tonnes a year, depending on HFCS prices
versus sugar prices, beverage and food manufacturers'
willingness to use an alternative sweetener, and consumer
"Rabobank believes that isoglucose production could take
off, particularly in grain and starch-rich but sugar-poor
countries such as Hungary, Romania and Bulgaria," the Dutch
company said in a report released this week.
The big question is how much demand there will be for
cereal-based sweeteners after the lifting of quotas.
In the United States, Mexico and China, isoglucose has
seized market share from sugar for use in beverages.
The lifting of quotas could bolster isoglucose production in
the EU, but concerns over possible links between HFCS and
obesity may limit its market potential.
"Various publications worldwide have indicated that high
sugar intake could have possible negative health effects," said
the Rabobank report, authored by Ruud Schers and Vito Martielli.
"For isoglucose, the picture is even more complicated due to
certain claims linking HFCS consumption not only to obesity but
also to other negative health effects."
Jamie Fortescue, managing director at the Brussels-based
European Starch Industry Association, said industry had not yet
revealed its investment plans for isoglucose, but he saw
potential for output to rise to 2.5 million tonnes.
"Industry are closely watching the price of sugar relative
to the price of cereals," Fortescue said.
"Any potential investments are dependent on whether
consumers are willing to make a switch from sugar to
Fortescue and Sergey Gudoshnikov, a senior economist with
the International Sugar Organization, said they agreed with
Rabobank that isoglucose investment was likely to grow in
cereal-rich and sugar-poor East European countries.
Foremost among these was likely to be Hungary, the base of
Hungrana, whose investors include Tate & Lyle Plc and
Archer Daniels Midland, he added.
"Hungrana have the experience and the existing capacity,"
"It would be easier to expand existing capacity than to
build new capacity."
(Editing by Dale Hudson)