Sugar industry outlook

Sugar industry outlook

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Sugar industry outlook

Sugar industry is a sweet business with its own challenges. The sweet crystalline product derived from various plants like sugar cane and sugar beet. Primary use for sugar is as a sweetener in food and beverages. It is believed that sugar uses were first seen in Polynesian Islands over five thousand years ago. So, early Polynesian discovery was that sugar cane contained sugar tasting liquid. Thus, they started using it to prepare food and beverages. Therefore, through trade, sugarcane became widespread throughout the world. Christopher Columbus, in 1493 introduced sugar cane to the Caribbean. The crop thrived well in fertile land.

In 2022/23, sugar production was about 177 million tonnes worldwide. Asia was the largest producing region globally during this period. Its yield was approximately 60 million tonnes of sugar. Sugar production in Brazil has been fluctuating on the past five years.

Sugar production

Currently, approximately 110 countries produce sugar. It is from either sugar cane or beet. Furthermore, eight countries produce sugar from both, cane and beet. Sugarcane, on average is accounting for almost 80% of sugar production worldwide. Thus far, the top ten producing countries are Brazil, India, EU-27, China, USA, Thailand, Russian Federation, Mexico, Pakistan and Australia.

Sugar crops offer production alternatives to food too. It includes livestock feed, fibre and energy. Particularly biofuels like sugar-based ethanol and co-generation of electricity from cane bagasse. In fact, sugarcane is generally considered as the most important and efficient sources of biomass for biofuel production. Furthermore, there is a wide range of social and environmental connection with sugar industry. It includes sugar crop farmers, processors, sugar production and food companies. So, each stakeholder is seeking ways to combat concerns in relation to sugar production, biofuels and sustainability.

International trade

The volume of international sugar trade increased to a new record.  Similarly, world consumption in 2022 rose too. Major sugar consuming markets are India, EU-27, China, USA, Brazil, Indonesia, Russia, Pakistan, Mexico and Egypt. So far, the key drivers which influence sugar consumption include population growth, per capita incomes, health concerns and price of sugar or alternative sweeteners.

There has been multi-million growth in exports by India and Thailand. Thus far, there was no significant change for Brazil, by far the largest exporter in the world.  The world sugar economy returned a surplus in 2022 after one year of deficit. Presently, world sugar output exceeds global use. Despite significant growth in use of sugar in terms of per capita consumption, the world average is 22.1kg. It just recovered to that of pre-pandemic 2019. In view of a statistical surplus, world market prices for both raw and refined sugar remains relatively strong.

Production outlook

Sugarcane and sugar beet production projection for both are to grow. It is to be driven by area expansion and yield improvements. Thus far, growth for sugarcane expects to be greater than sugar beet. It is mostly due to faster area expansion. However, sugar beet continues to benefit from productivity gains because of mechanisation. Sugarcane cultivation is predominantly in tropical and sub-tropical countries. These include countries in Asia, Latin America and Africa. It continues to be the main crop to produce sugar.

This growth is driven by sustainable economic expansion and population growth. Thus far, sugar demand is Asia expects to represent over half of the global consumption by 2029. While Africa will experience a similar population growth, the increase in its consumption should be much lower. In fact, sugar consumption growth in Africa projects to be less than half of projection for Asia.