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As Nestle cuts down on sugar, world's top producer is beefing up

{LONDON] At a time when food giant Nestle SA is taking a step back from sugar, the world's top producer of the sweetener is churning out more than ever.

Germany's Suedzucker AG expects to boost output by 30 per cent this season as the end of decade-long European restrictions allows it to ship out more. The company is increasing sales to the Middle East and Africa, and even recently had a cargo destined for Haiti, once a sugar producer itself.

The opening up of Europe's market is adding to a global glut and comes as more Western consumers lose their sweet tooth amid obesity and diabetes concerns, forcing food manufacturers to shift strategies. Nestle, which is nearing a sale of its US confectionery business, plans to put more focus on other products, like coffee and pet food.

The shakeup between different parts of the sugar industry is taking place amid contrasting demand trends in developed and emerging markets. As US and European consumers cut back, consumption is growing in Africa and Asia due to burgeoning middle classes and growing populations.

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Globally, sugar consumption edged up 0.2 per cent in the year ended Sept 30, the lowest rate in at least six years, according to data from Tropical Research Services.

Suedzucker will produce 5.7 million metric tons of the sweetener in the season that started in October, it said in an earnings statement Thursday. That's a faster increase than expected across the whole of the European Union, where output is forecast to climb almost 20 per cent.

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