Asian Turmoil Seen Eating Into Sugar Demand

The financial crisis ripping Asian countries is likely to sharply cut into demand for sugar, reversing a high growth pattern, a top official of an international commodity firm said on Thursday.

Sugar consumption in Japan, Indonesia, Malaysia, South Korea and Thailand will be reduced by the crisis, according to James Fry, managing director, LMC International Ltd. He was speaking at a sugar conference in the city. For them, sugar consumption is likely to be hit by the slowdown in economic growth, and the calamitous drop in their consumers' purchasing power, Fry said in a paper presented at the two-day sugar conference.

IBC Asia Ltd is conducting the seminar in association with the Indian Sugar Mills Association.

The dramatic slide in Asian currencies and stock markets since July 1997 has brought many Asian countries to their knees, forcing analysts to slash consumption estimates from the region. Hitherto, Asia's increasing prosperity had driven growth in global demand for commodities.

But Fry said the three most populous of the five leading Asian countries are likely to experience a decline in their per capita demand for white sugar, this year. In aggregate, the five countries, which consumed almost 11 million tonne of white sugar in 1997, are forecast to suffer a reduction of over 1,30,000 tonne in 1998.

The ultimate effects of Asia's economic woes on regional consumption are likely to remain a mystery, and a continuing source of speculation for some time, LMC had said in a January sugar report.