The average sugar price, as reported by the National Sugar Development Council, was N579,400 per tonne for the week ending July 29, 2022.
The Times reported that in Nigeria, sugar prices have risen, and there is still room for price increase, as seen by the combination of rising demand, worsening weather, and price indices of cash scarcity.
When compared to the 2022 pricing, this works out to N835,400 per tonne for the week ending July 28, 2023, or 44.2%.
Nigeria imports roughly 98% of the sugar it requires; the remaining 2% is domestically produced. India, the world’s largest producer and exporter of sugar, is currently dealing with a drought that has cut production and affected supply, driving up sugar prices globally.
The best-performing commodity globally on the global commodities market is sugar, which has increased by 44% since the start of the year.
A greater emphasis has been placed on bringing raw sugar into the country where it is refined and sold by Dangote, BUA, and Flour Mills of Nigeria.
Imports of sugar are also being impacted by the lack of foreign exchange and the naira’s depreciation. Since the managed float FX system was implemented in June, the value of the naira has decreased by around half.
Currently, the global demand for sugar exceeds 180 million tonnes yearly, driven by both individual consumers and businesses that require massive quantities of the commodity to manufacture their goods.
Brazil, Thailand, China, and the United States are four other significant sugar producers whose weather and climate already place restrictions on their ability to produce sugar.
India is the world’s largest consumer and producer of sugar, as well as the second-largest exporter of it after Brazil, however this season it only exported 6.1 million tonnes, down from 11.1 million tonnes of the crop year 2021-2022.
According to traders and industry authorities, the price of sugar in India surged by more than 3% in just two weeks to a six-year high as worries about the output of the commodity intensified due to the countries’ key sugar-producing regions’ inadequate rainfall.
The recent unexpected decision by OPEC to substantially reduce oil production, with Saudi Arabia and Russia reducing even more oil, was another factor contributing to higher prices.
According to Fitch Solutions’ Q2 report, this promotes the use of sugarcane for ethanol production rather than for the manufacture of sugar.
