ManageMent’s Discussion anD analysis Security of Raw Sugar Supply Weather and Other Factors Related to Production  Competition  Annual Report 2013 31 The Company faces domestic competition from Redpath Sugar Ltd. and smaller regional distributors of both foreign  and domestic refined sugar. Differences in proximity to various geographic areas within Canada and elsewhere result in  differences in freight and shipping costs, which in turn affect pricing and competitiveness in general.  In addition to sugar, the overall sweetener market also includes: corn-based sweeteners, such as HFCS, an alternative liquid  sweetener, which can be substituted for liquid sugar in soft drinks and certain other applications; and non-nutritive, high  intensity sweeteners such as aspartame, sucralose and stevia. Differences in functional properties and prices have tended to  define the use of these various sweeteners. For example, HFCS is limited to certain applications where a liquid sweetener can  be used. Non-nutritive sweeteners are not interchangeable in all applications.The substitution of other sweeteners for sugar  has occurred in certain products, such as soft drinks.We are not able to predict the availability, development or potential use  of these sweeteners and their possible impact on the operations of the Company.  Sugar beets, as is the case with most other crops, are affected by weather conditions during the growing season.Additionally,  weather conditions during the processing season could affect the Company’s sugar extraction of beets stored for processing.  A significant reduction in the quantity or quality of sugar beets harvested due to adverse weather conditions, disease or other  factors could result in decreased production, with negative financial consequences to Lantic.  The availability of sugar beets to be processed in Taber, Alberta is dependent on a supply contract with the Growers, and on  the Growers planting the necessary acreage every year. In the event that sufficient acreage is not planted in a certain year,  or that the Company and the Growers cannot agree on a supply contract, sugar beets might not be available for processing,  thus requiring transfer of products from the Company’s cane refineries to the Prairie market, normally supplied by Taber.  This would increase the Company’s distribution costs and may have an impact on the adjusted gross margin rate per metric  tonne sold. There are over 180 million metric tonnes of sugar produced worldwide. Of this, approximately 50 million metric tonnes  of raw cane sugar are traded on the world market. The Company, through its cane refining plants, buys approximately 0.6  million metric tonnes of raw sugar per year. Even though worldwide raw supply is much larger than the Company’s yearly  requirements, concentration of supply in certain countries like Brazil, combined with an increase in cane refining operations  in certain countries, may create tightness in raw sugar availability at certain times of the year. To prevent any raw sugar  supply shortage, the Company normally enters into long-term supply contracts with reputable suppliers. For raw sugar  supply not under contract, significant premiums may be paid on the purchase of raw sugar on a nearby basis, which may  negatively impact adjusted gross margins.