Granular detail: golden syrup

Jun 21 2019

Golden syrup is fundamental to a huge variety of foodstuffs across the globe. Here we look at its link to Ragus’ history and what exactly it takes to produce the famous golden elixir.

What is the history of golden syrup?

Golden syrup’s journey into becoming one of the most easily recognisable and loved sugar products throughout the world begins with Ragus Sugars’ founder Charles Eastick. Spurred on the by the rapidly increasing ubiquity of sugar in British life, he, along with his brothers John Joseph and Samuel, established a sugar analysis practice in 1880. Initially, this was designed to assist with accurate pricing and duty payments, but an importing crisis in 1883 forced the brothers to experiment with turning the molasses-brown treacle-like by-product of the sugar refining process into a palatable product.

As a result, Charles devised the formulation for golden syrup. First sold in its now iconic metal tins just two years later, golden syrup has since been officially recognised as the world’s oldest branded product. Having made this breakthrough, Charles would then go on to develop unique methods for making brewers’ saccharum and other inverted sugars.

Fast forward to the 1920s, and it was the identification of another gap in the UK’s sugar market that would lead to the foundation of the Ragus Sugars. During this decade, very small amounts of specialised sugars were being imported into Britain, largely due to it being economically unviable for the larger manufacturers to produce these themselves. Having noticed this, Charles set up a factory on the brand-new Slough Trading Estate dedicated to the production of, among other things, golden syrup, with this being the predecessor to the state-of-the-art facility Ragus Sugars has today.

Golden syrup produced by Ragus, one of the world's leading pure sugar manufacturers, from its advanced manufacturing site in the UK that also produces a range of pure sugars, blends and glucose products

Golden syrup was first formulated by our founder, Charles Eastick, in order to deal with a sugar importing crisis in 1883

What products is golden syrup used in?

As with most full or partially inverted sugar syrups, golden syrup is primarily used when manufacturing products in bulk either as a humectant, to prevent crystallisation, or for its distinct flavour profile. It is also able to withstand higher baking temperatures, making it ideally suited for biscuits, cakes, cookies, and flapjacks. Our clients may produce these goods on an industrial scale for international retail, but recipes for how to reproduce their results on a domestic level can be found here.

What makes golden syrup so ideally suited to these applications is its properties. Not only does it possess a sweetness value approximately 20% greater than straight sucrose (white sugar), but it also has a subtle golden colour that gives many products their distinct appearance. Complimenting this is golden syrup’s mellow and instantly recognisable flavour.

The current rise in veganism has also seen golden syrup increasingly utilised as a substitute for honey in a variety of products. While in a technical sense one cannot be swapped straight for the other, the two possess enough similar characteristics to make golden syrup a passable vegan alternative in this context.

How is golden syrup produced at Ragus Sugars?

Golden syrup production at Ragus Sugars today is the perfect fusion of our storied heritage and present-day expertise. We have developed the initial formulation devised by our founder Charles Eastick and combined this with our cutting-edge manufacturing facility, resulting in a superior product that is used in foodstuffs the world over. As well as being explored in more detail in a previous blog, the below video details our golden syrup manufacturing process in full, from sourcing to delivery.

To order the original golden syrup for your application, contact us now. 

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Global sugar market report 2019

Jun 07 2019

Droughts, monsoons, and the world’s biggest vote – it’s been quite a few months for the sugar market across the globe.

Global sugar market position

Last year saw extraordinarily good weather for growing sugar crops globally, resulting in record crops and stocks. Global sugar prices, therefore, dropped below 10 c/lb for the first time in ten years. Sugar prices are now starting to recover slightly, currently at 12 c/lb, which is approaching the 15 c/lb we saw in our last report at the end of January, but still nowhere near the level needed to turn a profit.

The top 20 global sugar companies reduced production in 2018/19 and world production is estimated to fall to 187.3 mln tonnes in 2019/20 from 201.2 mln tonnes in 18/19. Low sugar prices have seen profits reduce across the industry, leading to losses and rising debt levels for production mills. A continuing contributing factor to these falling global prices has been India’s domestic support to cane farmers and its subsidies to sugar exports. A further impact of this has been reduced production in Brazil, Thailand and China.

On the other hand, European producers have multi-year agreements with beet farmers, meaning sugar beet production will remain high for 2019/20, keeping prices low and impacting on producer margins. Global sugar production for 18/19 is estimated at 185.7 mln tonnes with global consumption at 184.9 mln tonnes, up from 183.3 mln tonnes in 17/18. The minimal global surplus compares with a surplus of 7.8 mln tonnes in 2017/18.

Beet surpluses and insecticide bans continue to cause issues in Europe

The European sugar sector has suffered an unprecedented change since the abolition of EU sugar quotas in 2017, distorting the market during this transitional period. Germany’s Südzucker saw sugar beet production reduce by 1.2 mln tonnes, Tereos of France suffered from oversupply on the EU market, and AB Sugar of the UK also suffered with profitability, with this blow being somewhat softened by a weak British pound. Nordzucker of Germany and Cristal Union of France both saw beet sugar production fall by 400,000 tonnes each.

These low sugar prices, combined with a continuing ban on the use of neonicotinoid, have seen beet planting across Europe for the 2019/20 crop down by 6%. The ban was introduced to protect the harming of bees from the use of the insecticides found in neonics. However, with no suitable alternative, Austria, Belgium, Croatia, Czech Rep, Denmark, Finland, Hungary, Poland, Romania and Slovakia are exempt from the ban. As well as this, the population count of Aphids is increasing across Europe, particularly in Belgium, Netherlands and the UK.

The reduction in sugar production from the 18/19 crop has seen a reduction in exports and an increase in sugar imports. Predictions for the 2019/20 beet crop are up slightly at 18.6 mln tonnes compared to 18.2 mln tonnes in 18/19, due to an expected yield recovery which was affected by drought last year.

Sourcing is at the heart of Ragus' business: it sources sugar beet from Europe and travels the world from Africa to the Caribbean to South America and the Pacific countries to find the best, most reliable, and sustainably produced, sources of cane sugar. The sugar is manufactured by Ragus at its UK plant into a range of pure sugars, syrups and special formulations

Weather disrupts sugar beet planting in Ukraine and Russia

Having been delayed by a cold, wet spring, sugar beet sowing is almost complete in Russia. Ukraine has experienced heavy rains which may result in lower beet yields and decreased extraction rates, although the total area sown has more than doubled compared to this time last year.

Indications for the 2018/19 harvest is Russia producing 6.5 mln tonnes, down from 7.1 mln tonnes in 17/18 and the Ukraine producing 2.0 mln tonnes of sugar. Factories will continue producing sugar from beet syrup from the 18/19 crop until the end of this month.

Brazilian currency fluctuations could affect world sugar prices 

Above average rains helped cane development of the 2019/20 crop. Harvesting began in April and continues at a good pace but is still behind last year. The volatility of the oil market and the Brazilian currency is not favouring an ethanol orientated sugar mix resulting in VHP sugar prices above that of hydrous.

Longer term this could affect the world sugar prices, with the market not needing any additional sugar from Brazil. The reality though is that 101 mills will not operate this year (23%) due to depressed sugar prices, so the likelihood is that the cane will be used for ethanol production at around 63.5% of the share, reducing sugar yet again to 36.5%.

The end of the 2018/19 harvest in Brazil was disrupted by heavy rains, sugar production reaching 26.5 mln tonnes, which was 13.9 mln tonnes less than 17/18 production. Cane used to produce sugar fell to an all-time low with mills unlikely to switch back to producing sugar until prices recover to over 13 c/lb.

Dry weather leads to good cane harvest in Thailand

An early start to the harvest with continued dry weather gave the cane a high sucrose concentration, resulting in good yields. Analysts predicted an early finish to the 2018/19 crop later this month. The tail end to this year’s crop is strong and will be close to the record 17/18 harvest which produced 15 mln tonnes of sugar, meaning exports will hit an all-time high as the country tries to reduce its stocks. For 2019/20, the deregulation no longer allowing government subsidises for cane growing during times of low world market prices is likely to result in less sugar being produced.

No signs of sugar industry subsidies ending as India re-elects PM

Early bullish predictions for the 2018/19 crop had to be altered as the crop evolved due to weather and pests impacting on the cane development, however the crop recovered and now at the tail of the harvest, estimates have increased to 35.9 mln tonnes. A historical high level of stocks (25.5 mln tonnes) is being stored by the Indian mills, so the newly elected government is likely to extend export subsidies into the 2019/20 season in order to clear this glut of sugar and help prop up local prices.

Australia, Brazil and Guatemala are trying to halt India via appealing to the WTO, stating that the government is granting more than the agreed 10% subsidy. With high payment arrears, many farmers are switching to other crops such as soybean and pulses. A poor monsoon, which is already delayed, in the months of June to September from the El Niño effect will also contribute to a reduced 19/20 crop.

Drought recovery boosts Africa’s production levels

Due to several countries’ recovery from severe drought conditions, African cane sugar production is expected to rise to 10.3 mln tonnes in 2018/19 compared to 9.4 mln tonnes in 17/18. However, domestic sugar prices have strengthened in Africa as a result of flooding in Malawi, Mozambique and Zimbabwe after cyclone Idai hit the region in April. Mauritius is expected to produce 325,000 tonnes of sugar from the 2018/19 crop, an increase on earlier predictions but down on the 355,000 tonnes produced in 17/18 and continues the country’s sugar decline from the 600,000 tonnes produced in the early 2000s.The country is looking to increase exports of speciality sugars to 180,000 tonnes by 2023.

In South Africa the government may consider support measures to help restructure the sugar industry. Sugar production reached 2.1 mln tonnes in 18/19, compared with 1.9 mln in 2017/18 after the recovery of the cane yields. In Swaziland good rainfall levels have seen sugar production rise by 14% to a record 800,000 tonnes.

Nordzucker makes move for Australia’s Mackay Sugar

The 2019/20 harvest is starting up and it is predicted that the sugar produced will fall to less than 4.6 mln tonnes as a result of too much rain in the north and not enough in the south. The Australian 18/19 harvest came to an early end in December, dry weather leading to a drop in yields with the country producing 4.7 mln tonnes, the same as in 17/18.

Nordzucker of Germany is looking to purchase 70% of Mackay Sugar, which needs restructuring and funds to invest in its deteriorating mills. The company has not made a profit since 2014 due to falling sugar prices. Farmers back the offer as it would secure their future crop and give them a 30% stake in the company.

Mexico rises while the USA falls

Wet weather delayed the start of the 2018/19 Mexican harvest, but a strong sucrose yield and increased acreage planted saw 6.2 mln tonnes sugar produced in 18/19. More than 700,000 tonnes of sugar have been diverted onto the world market due to the reduction in the US quota, making Mexico one of the biggest exporters in 2018/19.

The US beet crop will be the smallest since 14/15 at 4.4 mln tonnes due to cold weather in the harvest season, resulting in lower extraction rates. The cane crop, however, is expected to reach a record 3.7 mln tonnes. US stock levels are high resulting in the reduced Mexican import quota.

China increases its cultivation area

China has increased its area under cultivation for sugar crops in 2019/2020 by 5,000 hectares compared to the 18/19 season. The sugar purchasing price has remained stable with continued enthusiasm for the crop over lower prices for alternatives. China’s sugar production for 19/20 is estimated to be 10.88 mln tonnes, an increase of 150,000 tonnes over 18/19. Sugar consumption remains unchanged at 15.2 mln tonnes. The need for imported sugar in 2019/20 will be 3.04 mln tonnes, which is an increase of 140,000 tonnes from 18/19.

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The importance of ethical sugar supply chains

Apr 25 2019

Ethical supply chains mean all actors are paid fairly for their work. At Ragus Pure Sugars, this approach is embedded in how we operate.

What is an ethical supply chain?

 

An ethical supply chain or ethical sourcing refers to a supply chain in which all operators are paid and treated fairly.

Current UK law designed to enforce this is vague at best. The Modern Slavery Act dictates that all companies must write a yearly statement detailing policies, due diligence and the steps carried out to assess and manage risk. Although this is then backed up by global human rights laws, a clear and obvious piece of legislation guaranteeing that the goods we consume are the product of an ethical supply chain is lacking.

 

Why do Ragus Pure Sugars source raw and white sugar ethically?

 

At Ragus Pure Sugars, we believe that sourcing raw materials from an ethical and sustainable supply chain is not just the right thing to do but the only option. Every actor in a supply chain should be treated fairly, benefit from a high quality of life and receive an adequate income. This approach to sourcing has defined our 90-year heritage.

The products we source have often come from areas with historical human rights issues, where labour laws are not as strict as the UK. As such, guaranteeing that we are part of an ethical supply chain is even more crucial, with our decades of experience meaning we have formed supplier relationships in these areas with fairness at their core.

Promoting human rights, anti-bribery, corruption best practice and environmental and social sustainability in these areas is not only the right thing to do but should be commonplace for all businesses.

How do Ragus Pure Sugars ensure an ethical supply chain?

 

For many years, Ragus Pure Sugars has taken steps to be transparent with our customers and we work hard with suppliers to ensure responsibility standards are being maintained.

Alongside the Ethical Trading Initiative (ETI) and SEDEX accreditations, we often visit our suppliers. This includes mills, plantations and supplier brokers, with each being assessed to ensure they all share the same high standards and responsibility values that define operations at Ragus Pure Sugars.

Participating in these food standard accreditation schemes and promoting the profile of the new policies on human rights, modern slavery and bribery outlines our commitment to sustainable and ethical sourcing, meaning that every sugar product that leaves our factory is exploitation and corruption-free.

Contact us to learn more about our approach to CSR or visit our page on the 10 pillars of CSR.

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What is Ragus Sugars’ approach to corporate social responsibility (CSR)?

Apr 05 2019

Corporate social responsibility (CSR) is a core component of Ragus Sugars’ business. Recently we reviewed our strategy and how responsibility underpins our brand.  

 

In 2011 we developed our first CSR strategy that drew together multiple threads of responsibility-related systems and processes already woven into our business operations, marketing and decision making. This led to the creation of our Eight Pillars of CSR, covering core values and activities such as health and safety, quality and sustainability.

Since then we have completed regular reviews of our CSR, seeking always to identify improvements. Our latest 2018/19 review highlights new policies and policy updates that reinforce our ongoing commitment to being responsible.

These include the Bribery Act and anti-corruption initiatives, human rights, anti-slavery and trafficking measures. They ensure every aspect of our supply chain is fair and ethical. As a result, our position on CSR has now become the Ragus Sugars Ten Pillars of CSR.

The most important finding of this review is that responsibility has become so embedded in our business, its strategy and decision making, operations and supply chain that it no longer requires special treatment. For us, being responsible is just business as usual.

 

Ragus Sugars’ Ten Pillars of CSR

 

CSR is fundamental to the Ragus brand and how the business operates, so much so that a separate CSR strategy is no longer needed.

However, we have retained and expanded on our original Eight Pillars of CSR, adding anti-corruption and bribery and human rights as we have created and adopted new policies in these areas. The result is the Ragus Sugars Ten Pillars of CSR:

  1. Health and safety of all our stakeholders
  2. Quality
  3. Employees
  4. Sustainability
  5. Customers
  6. Supply chain
  7. Society
  8. Risk management
  9. Anti-corruption and bribery
  10. Human rights

 

Having embedded responsible and sustainable strategies and practices in our business, we continually monitor our performance. This allows us to identify where further improvements can be made.

 

What CSR accreditations does Ragus hold?

Our internal standards are high, but we don’t measure ourselves. We have invested in gaining multiple international standards and accreditations to ensure we are constantly benchmarked against demanding third party standards, including our customers.

The advanced plant in Slough, England, where we produce our sugars holds accreditations for ISO 9001, ISO 14001, OHSAS 18001, ISO 50001, BRC, HACCP and FEMAS.

In addition, Ragus’ quality control systems have been accredited by UN FAO Sugarmark, and Bonsucro, alongside other leading industry bodies. We are also recognised by SMETA (SEDEX Members Ethical Trade Audit), and are Institution of Occupational Safety and Health qualified, for the health, safety and ethical treatment of all employees.

During 2019, we will evaluate CSR guidance frameworks ISO 26000 and the Global Reporting Initiative, to determine if there are benefits to using reporting frameworks that may better inform our stakeholders about our CSR activities.

Alongside this, CSR is an agenda item at all board meetings, reviewing our whole business from a responsible perspective.

Contact us to find out how you can benefit from our responsibly produced sugars.

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Sugar prices set to rise if no deal Brexit, shows Government Tariff Reference Document

Mar 15 2019

Industrial sugar costs will rise if the UK leaves the EU without a deal on 28 March, as a result of a new post-Brexit tariff regime announced by Government.

 

New post no deal Brexit tariffs increase EU sugar import costs

 

Industrial sugar customers across sectors such as food and beverage, pharmaceuticals, brewing and baking are facing an increase in the cost of some raw materials if the UK leaves the EU on 28 March without a deal.

On 13 March, the Government has published its new tariffs, The Customs Tariff (Establishment) (EU Exit) Regulations, potentially leaving only two weeks for businesses to prepare for the prices changes. And the tariffs are likely to remain in place for only one year, possibly resulting in another tariff and price change end-March 2020.

Tariff cost to industry of £37.5m annually

 

The new €150/t levy on imported white refined sugar for direct consumption, applied because the UK is a deficit sugar market requiring approximately 250,000 tonnes of sugar imports each year, will increase industrial sugar processing costs.

A price increase of this magnitude, which could turn into an annual £37.5m cost rise across the industry, cannot be absorbed by the supply chain, so will be passed on to sugar buyers. This will result in a minimum increase of €150/t for white sugar imported from EU countries.

However, as I write this, MPs have decided that leaving with no deal is not an option and the prospect of an extension is looking possible, adding to uncertainty. An extension could mean this latest tariff notice is irrelevant, but it may be a good indication of what trade negotiators will be seeking out of future trade deals.

Ragus produce a wide range of Pure Sugar products at its world-leading sugar manufacturing site in the UK, including sugars, refiner’s syrups, treacle and Molasses. Ragus’ manufacturing site produces hundreds of tonnes of sugars and syrups each day, all manufactured to the highest quality to ensure customers’ specifications are met.

 

What will be the sugar import tariffs post a no deal Brexit?

 

Should the UK leave on 29 March without a deal, and day-by-day the outcome is looking increasingly unlikely, the new tariffs and resulting price changes will apply after 28 March.

The tariffs on sugar imports into UK for direct consumption will be:

• White refined sugar: €150/t, which is a special tariff as UK is a deficit market
• Raw Cane Sugar €419/t, the default WTO tariff
• Molasses: currently €0/t
• Glucose Syrup: €200/t

Tariffs on sugar imports for refining into white sugar will be:

• Raw Beet Sugar: €339/t, the default WTO tariff
• Raw Cane Sugar: €339/t, the default WTO tariff

The UK would continue trade preference agreements with LDC/LPAs that have existing EU trade agreements.

Who will pay for the sugar tariff increases?

 

In conclusion, the import of white refined sugar to supply the deficit UK market, which is approximately 250,000 tonnes, will go up by €150/t, if imported from the EU, but reduce to €150/t if imported from outside the EU.

Realistically, though, this sugar will come from within the EU. The consequence of this will be that the UK supply chain won’t absorb the resulting additional £37.5m cost of this sugar coming from the EU.

As a result, the UK white sugar market price is likely to increase by a minimum €100/t post-Brexit.

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Brexit blog 2: Will UK sugar price volatility improve post-Brexit?

Mar 07 2019

Post-Brexit tariff-free deals with non-EU countries should reduce UK sugar prices and help calm a volatile market. But only if markets function properly.

Why is the UK sugar price so volatile?
Sugar prices in the UK when buying in sterling fluctuate extensively. For example, over the last 12 months, for some buyers the price of sugar in the UK has changed by 35%. A 35% increase in raw materials costs is a huge deal for our customers, such as brewers, bakers, confectioners, food and beverage producers and pharmaceutical companies.

Sugar is bought and sold within the EU using euros. So, if you are buying in sterling from a euro supplier, the UK price volatility is driven by the euro-sterling currency fluctuations, known as the Unofficial Sugar Conversion Rate, or USCR. The USCR can change every 14 days, depending on underlying exchange rates. If the euro-sterling exchange rate is more than 1% different when compared to the rate two week’s previously, the USCR will change.

UK sugar buyers must then add another €20 per tonne to ship sugar across the Channel – UK prices are always higher than those in continental Europe. In addition, UK buyers and end consumers pay more for sugar cane derived products because of EU tariffs, as I’ve discussed previously.

What can reduce sugar price volatility?
There are dozens of sugar cane producing nations outside of Europe – 80% of world sugar production is by sugar cane producing nations. Theoretically, so many suppliers spread geographically around the world manages risk, as the chances of massive under or over supply are reduced. This level of competition should keep prices down.

This is only in theory. There are, in fact, only two major producing nations: Brazil and India. Nearly half of all sugar production in Brazil ends up being used for ethanol production to fuel vehicles.

India is the largest consumer, so if domestic production is poor, then India not only won’t export, but may well buy up surplus global production. The unique features of these two largest players impact significantly on global sugar market prices and price volatility.

Why has UK sugar cane consumption declined in the last decade?
Because of our history and our existing close ties with many commonwealth nations that are also sugar cane producers, the UK is Europe’s largest consumer of sugar cane derived sugar products. Approximately 25%, or 450,000 tonnes each year, of the sugar we consume is from sugar cane.

Before 2006, the ratio of UK sugar beet consumption versus sugar cane was 50:50, so we imported over a million tonnes of sugar cane each year for UK consumption. Then, in 2006, the EU introduced a 36% cut in prices paid to sugar producers generally, cane and beet. The result of this was huge investment by European sugar beet farmers to improve productivity and output. This massive increase in EU grown tariff-free sugar beet has meant that sugar cane imports have declined.

As I highlighted in my previous blog, How will a no deal hard Brexit affect the UK sugar industry?, if the UK leaves the EU without a deal, or a deal which enables the UK to negotiate its own trade deals with non-EU sugar producers, we should have access to global markets and not be so reliant on the EU’s sugar beet production.

But, as you’ve seen so far, the global sugar market is not quite so simple.

The UK leaves the EU with no deal or a deal allowing third party trade agreements
In a perfect post-Brexit world, the UK can negotiate trade deals with sugar cane producing countries with low or no tariffs. These multiple sources of supply should result in low and stable prices to fill the gap between the UK’s domestic sugar beet supply for white sugar, currently 1.4m tonnes, and current domestic demand of 2m tonnes. Trade deals should also drive down the current cost of sugar cane imports, artificially elevated because of EU tariffs.

But the UK’s sugar market functions as an oligopoly, which means there is limited competition because there are only a small number of refiners. Two to be precise: one sugar beet refiner dominating the market and one that imports sugar cane for refining into white sugar.

Naturally, businesses don’t want prices to go down, and, with so few producers, it is possible for a dominant supplier to effectively dictate sugar prices, whatever deals and fixed prices we negotiate with non-EU sugar producers.

As a result, we are unlikely to experience the full benefits of a post-Brexit world in which we can import tariff-free sugar.

What happens if the UK does a tariff-free Brexit deal with the EU?
Should the UK negotiate a deal that includes remaining in the customs union and single market, little is likely to change. That’s because the UK will continue to take its sugar supplies mainly from domestic sugar beet production and it is reasonable to assume low or no tariff sugar beet imported from the EU.

Sugar cane will continue to be imported but will remain subject to some form of tariffs, quite possibly the same levels of between €90 and €419 per tonne currently in force. The benefits of global tariff-free sourcing from multiple suppliers won’t be realised and the price-volatile USCR will remain.

Back in the early 1990s, we used to set our prices for our customers annually, as the sugar market was relatively stable. Whatever the outcome for sugar post-Brexit, that’s a market state we’d like to see returning so our customers don’t experience huge fluctuations in raw material costs during the year. Such a situation may be possible if the UK can negotiate the right Brexit deal followed-up by free-trade agreements with sugar cane producing nations.

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