1. Implications of WHO Recommendation on Sugar Producers Donald Mitchell Lead Economist The World Bank

2. WHO Dietary Recommendation on Sugar Reduce added sugar of all types to 10 percent of total energy consumption Reduce added sugar of all types to 10 percent of total energy consumption Sugar is defined as all mono- and disaccharides added to foods plus sugar naturally occurring in honey, syrups and fruit juices Sugar is defined as all mono- and disaccharides added to foods plus sugar naturally occurring in honey, syrups and fruit juices

3. Based on Irz and LMC studies Global sugar consumption would decline about 20 million tons (16%), with largest adjustment in US and some developing countries Global sugar consumption would decline about 20 million tons (16%), with largest adjustment in US and some developing countries Trade would decline by about 6-10 million Trade would decline by about 6-10 million

4. Major Uncertainties Extent and timing of adjustment in consumption Extent and timing of adjustment in consumption Substitution possibilities Substitution possibilities Interaction of policy commitments and consumption adjustments Interaction of policy commitments and consumption adjustments Policy responses Policy responses

5. Impact of WHO Recommendation Will consumers adjust to WHO recommendations? Will consumers adjust to WHO recommendations? Relevant comparison may be tobacco Relevant comparison may be tobacco Which has had health warnings for about 40 years and is starting to see changes Which has had health warnings for about 40 years and is starting to see changes

6. Substitution Possibilities-larger than studies suggest? Non-caloric sweeteners in soft drinks could replace sugar and HFCS Non-caloric sweeteners in soft drinks could replace sugar and HFCS Saccharin – still used in 100 countries Aspartame – used in US HFCS may be big loser if consumers adjust total sugar intake HFCS may be big loser if consumers adjust total sugar intake

7. …other substitution possibilities Sucralose made from sugar could replace sugar in baking and pastries Sucralose made from sugar could replace sugar in baking and pastries Approved for use US in 1998 Most of properties of sugar but chemically altered to prevent absorption  No change in sugar consumption

8. Policy Constraints US cannot reduce imports because of agreement with quota holders made in 1990 US cannot reduce imports because of agreement with quota holders made in 1990 All adjustment to consumption would come from US producers All adjustment to consumption would come from US producers EU has ACP quotas which cannot be reduced and EBA commitments which could not easily be reduced EU has ACP quotas which cannot be reduced and EBA commitments which could not easily be reduced

9. Policy Response Adds to other pressures for reform during Doha Round trade negotiations Adds to other pressures for reform during Doha Round trade negotiations Weakens support for sugar production in EU and US as happened with tobacco Weakens support for sugar production in EU and US as happened with tobacco

10. Possible Outcome Reduced production in EU and US and hasten reforms of current sugar programs Reduced production in EU and US and hasten reforms of current sugar programs Substitution of non-caloric sweeteners Substitution of non-caloric sweeteners Slower growth of consumption in Developed Countries and possibly some Developing Countries Slower growth of consumption in Developed Countries and possibly some Developing Countries

11. Sugar Producers Diversify Importance of increased export market opportunities through agricultural liberalization in Doha Round Importance of increased export market opportunities through agricultural liberalization in Doha Round Sugar is among the most distorted commodity markets with high protection in EU, Japan and US which limit imports. Sugar is among the most distorted commodity markets with high protection in EU, Japan and US which limit imports. Trade reform would increase exports of developing countries including sugar Trade reform would increase exports of developing countries including sugar