Milling & Baking News - April 6, 2021 - 23

Trade agreement in 2008. US refiners
had exported between 150,000 and
nearly 200,000 tonnes, dry weight basis, of total fructose (mainly HFCS55
but also some HFCS42 and crystalline fructose) to Mexico annually from
1997 through 2000 (calendar year), but
those shipments plunged to a low of
about 5,700 tonnes in 2003 amid challenges from Mexico's sugar industry
unhappy with the displacement of
sugar used by Mexican bottlers and
others. US exports recovered to about
330,000 tonnes by 2007. As in the United States, HFCS was an economical
alternative to sugar in Mexico.
NAFTA opened unlimited, dutyfree trade in sweeteners (mainly
sugar and HFCS) between the two
countries. Mexican bottlers imported
HFCS to replace the large amount of
sugar being exported to the United
States, a far more lucrative destination
for Mexico's excess sugar than other
world markets. Shipments of HFCS
to Mexico jumped by 36% in 2008,
the first year of the agreement respective to sweeteners, finally peaking at
1,138,750 tonnes in 2012, nearly threeand-a-half times the 2007 amount.
But it was an uneasy period for
HFCS exports because sugar trade between the two countries grew more
contentious over the next several years,
with Mexico threatening to suspend or
limit imports of US HFCS in retaliation
for US sugar producers' challenges to
its large sugar exports to the United
States. With unlimited, duty-free exports to the US market, Mexico boosted
its sugar production, rising to a record
6,975,000 tonnes, actual weight, in 201213, up 37% from the prior five-year average. The influx of sugar from Mexico
contributed to eight-year low prices for
US sugar and culminated in US sugar
producers filing anti-dumping and
countervailing duty complaints against
Mexico. US sugar producers prevailed
in 2014, anti-dumping and countervailing duties were imposed and subsequently suspended per agreements to
limit Mexico's exports of sugar to the
United States.
US exports of HFCS to Mexico took
a hit as a result, but not as severely as
some had feared as Mexico quickly
trimmed sugar production to an average just over 6 million tonnes annually over the next five years, down 16%
from the 2012-13 peak. US shipments
of HFCS to Mexico dropped to 900,967
tonnes in 2014 and would build back
to a recent high of 1,052,748 tonnes in
2017, when other factors began to affect
both sugar and HFCS consumption in
bakingbusiness.com / world-grain.com

Mexico - namely sweetener taxes and
a major government push to reduce
consumption of added sugars.
Mexico remains by far the largest
export market for US HFCS.
The latter years and beyond: Decline?
While cooler heads prevailed in the
sweetener industry after the lawsuits
were settled in 2015, problems for
HFCS are far from over.
Deliveries of HFCS in the United
States dropped another 25% from 48.4
lbs per person in 2010 to 36.7 lbs in 2019
(the most recent data available), according to the USDA. That's the lowest
since 31.2 lbs in 1983, when the sweetener was in the early stages of a 30-year
upswing. From its peak of 63.8 lbs in
1999, per capita deliveries of HFCS in
the United States declined 42% over
the next 20 years, while sugar deliveries edged up 3.2% to 68.5 lbs in 2019,
although it should be noted that per
capita sugar deliveries have eased from
a recent high of 69.8 lbs in 2016.
Cost advantages over sugar, dependable supply and other functional benefits of HFCS have helped HFCS maintain a foothold in the US and Mexican
food and beverage markets. But those
benefits haven't slowed the decline in
use as some food manufacturers continue to formulate away from HFCS, in
part amid the clean label movement of
recent years but also because of general
sugar reduction. HFCS, along with sugar and soybean oil, all avoided the GMO
label despite coming mostly from GMO
crops, because any traits are eliminated
during the refining processes.
" In the 1970s beverage manufacturers were looking for alternatives to
high sugar prices, " Mr. Ruffolo said.
" It's no different today. Food manufacturers will continue to look for

alternatives for price and functionality. "
Mr. Brenner agreed, noting that
while HFCS is used globally, it is most
widely used in the United States and
Mexico, and " there remain opportunities around the world. "
And consumers are changing.
" The lines have blurred, " Mr. Ruffolo said, referring to generational
changes in consumer food and beverage preferences and demands, and
the " lumping of caloric sweeteners
together " as total added sugars rather than HFCS or sugar. The younger
generation has grown up only knowing the taste of soda sweetened with
HFCS, he noted.
Meanwhile, the corn wet milling
industry will adapt, he said, just as it
did in the past two decades reducing
HFCS production capacity to match
declining demand, thus maintaining
price levels because there was limited excess supply. The industry also
has adjusted its marketing technique
in recent years, now working mostly
with buyers rather than depending
as much on distributors, and pricing
supply based on individual customers rather than issuing blanket pricing
" letters " announcing increases.
So what lies ahead? Will the sharply
declining demand picture be accelerated by the overall push to reduce
added sugars? Will soda taxes, which
talk about sugar but in reality mostly
affect HFCS, increase and gnaw away
at HFCS consumption? Despite a colorful 50-year history, HFCS remains
second only to its longtime rival sugar
as the caloric sweetener of preference
in the United States. HFCS now may
well be locked in a battle with sugar
to maintain caloric sweeteners in food
and beverages rather than fighting
against sugar for market share. MBN

US exports of high-fructose corn syrup to Mexico
in tonnes, dry weight basis

1,200,000

2012 = 1,138,749.5

1,000,000
800,000
600,000
400,000
200,000
0
1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Source: US Department of Commerce, Bureau of the Census

Milling & Baking News

April 6, 2021 / 23

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Milling & Baking News - April 6, 2021

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