7 Reasons Why Sugar Export is a Lucrative Business in 2022
Sugar is one of the most widely consumed commodities in the world, with an estimated global consumption of 176 million metric tons in 2022/2023. The demand for sugar is driven by various factors, such as population growth, urbanization, income levels, dietary preferences, and industrial uses. However, not all countries produce enough sugar to meet their domestic needs, which creates opportunities for sugar exporters to tap into the global market.
In this article, we will explore seven reasons why sugar export is a lucrative business in 2022, based on the latest data and trends from the sugar industry.
1. Brazil is the dominant sugar exporter in the world
Brazil is the top producer and exporter of sugar in the world, accounting for about 35.6% of total sugar exports in 2022/2023. Brazil has a competitive advantage in sugar production due to its favorable climate, abundant land, low labor costs, and efficient sugarcane industry. Brazil also has a flexible ethanol program that allows it to switch between sugar and ethanol production depending on market conditions.
Brazil exported about 28.2 million metric tons of sugar in 2022/2023, mainly to China, India, Algeria, Bangladesh, and Nigeria. Brazil’s sugar exports are expected to increase further in the coming years, as it recovers from the impact of the COVID-19 pandemic and droughts that affected its sugarcane crop in 2021.
2. India is the second-largest sugar exporter in the world
India is the second-largest producer and exporter of sugar in the world, after Brazil. India produced about 34.5 million metric tons of sugar in 2022/2023, of which it exported about 18.6%. India’s sugar production is largely dependent on the monsoon rains, which affect the availability and quality of sugarcane.
India exported about 5.7 million metric tons of sugar in 2022/2023, mainly to Indonesia, Afghanistan, Sri Lanka, Somalia, and Iran. India’s sugar exports are expected to remain high in the near future, as it has a large surplus of sugar stocks and benefits from government subsidies and incentives.
3. Thailand is the third-largest sugar exporter in the world
Thailand is the third-largest producer and exporter of sugar in the world, after Brazil and India. Thailand produced about 12 million metric tons of sugar in 2022/2023, of which it exported about 9.9%. Thailand’s sugar production is mainly based on sugarcane, which is grown by smallholder farmers who rely on irrigation systems and contract farming arrangements.
Thailand exported about 3.1 million metric tons of sugar in 2022/2023, mainly to China, Indonesia, Malaysia, Japan, and South Korea. Thailand’s sugar exports are expected to grow significantly in the next few years, as it recovers from the impact of the COVID-19 pandemic and floods that affected its sugarcane crop in 2021.
4. Sugar prices are rising due to supply-demand imbalance
Sugar prices are rising due to a supply-demand imbalance in the global market. According to the International Sugar Organization (ISO), the global sugar market had a deficit of 4.8 million metric tons in 2021/2022, which was partly offset by a drawdown of stocks. However, the deficit is expected to widen to 6 million metric tons in 2022/2023, as global consumption outpaces production.
The ISO estimates that the average price of raw sugar was 18.28 cents per pound in 2021/2022, up from 12.45 cents per pound in 2020/2021. The price is expected to increase further to 19 cents per pound in 2022/2023, as demand remains strong and supply remains tight.
5. Sugar demand is growing in emerging markets
Sugar demand is growing in emerging markets, especially in Asia and Africa. According to the ISO, global sugar consumption increased by 1.9% annually from 2010/2011 to 2019/2020, reaching 174 million metric tons. However, consumption growth was uneven across regions, with Asia accounting for 60% of the increase and Africa accounting for 20%.
The ISO projects that global sugar consumption will grow by 1.4% annually from 2019/2020 to 2029/2030, reaching 194 million metric tons. Asia will remain the largest consumer region, with a share of 48%, followed by Africa with a share of 16%. The main drivers of sugar demand growth are population growth, income growth, urbanization, dietary changes, and industrial uses.
6. Sugar has multiple industrial uses beyond food and beverages
Sugar has multiple industrial uses beyond food and beverages, such as ethanol, bioplastics, pharmaceuticals, cosmetics, and chemicals. Ethanol is the most important industrial use of sugar, as it is a renewable fuel that can reduce greenhouse gas emissions and dependence on fossil fuels. Brazil is the largest producer and exporter of ethanol from sugarcane, followed by the United States, which produces ethanol from corn.
Bioplastics are another emerging industrial use of sugar, as they are biodegradable and eco-friendly alternatives to conventional plastics. Bioplastics can be made from various sources of sugar, such as sugarcane, corn, beet, and cassava. Some of the leading producers and exporters of bioplastics are Brazil, Thailand, France, Germany, and Italy.
7. Sugar export is a source of income and employment for many countries
Sugar export is a source of income and employment for many countries, especially in the developing world. According to the Food and Agriculture Organization (FAO), sugar production employs about 100 million people in 120 countries, mostly in rural areas. Sugar export also generates foreign exchange earnings, tax revenues, and linkages with other sectors of the economy.
Sugar export can also contribute to social and environmental sustainability, if it is done in a responsible and inclusive manner. Some of the best practices for sustainable sugar export include improving productivity and efficiency, reducing water and energy consumption, minimizing waste and pollution, enhancing biodiversity and soil health, respecting human rights and labor standards, and supporting smallholder farmers and local communities.
Sugar Export: A Global Overview
Sugar is one of the most traded commodities in the world, with a global production of about 177 million metric tons in 2022/23. The main producers of sugar are Brazil, India, Thailand and the European Union, which also account for most of the exports. In this blog post, we will look at some statistics and trends of the sugar export industry and its impact on the global market.
Top Sugar Exporters
According to Statista, Brazil was the world’s leading sugar-exporting country in 2022/23, with an export volume of about 28.2 million metric tons, followed by India with 11.9 million metric tons and Thailand with 11 million metric tons. These three countries alone accounted for about 64% of the total sugar exports worldwide. Other major exporters include France, Germany, Mexico and Guatemala.
The following table shows the top 10 sugar exporters in 2022/23 and their market share:
| Country | Exports (million metric tons) | Market share (%) |
|---|---|---|
| Brazil | 28.2 | 35.6 |
| India | 11.9 | 18.6 |
| Thailand | 11 | 9.9 |
| France | 3.8 | 3.7 |
| Germany | 2.8 | 2.9 |
| Mexico | 2.6 | 2.7 |
| Guatemala | 2.5 | 2.6 |
| Morocco | 1.1 | 1.4 |
| Colombia | 0.9 | 1.1 |
| Australia | 0.8 | 1 |
Source: Statista
Sugar Export Trends
The global sugar export industry has been affected by various factors such as weather conditions, crop yields, domestic consumption, trade policies and market prices. According to the International Sugar Organization, the world sugar market experienced a surplus of production over consumption in the last four years, leading to a decline in prices and export earnings for many countries.
However, the situation is expected to change in the next two years, as the global sugar balance shifts to a deficit due to lower production in some major countries such as Brazil, India and Thailand, as well as higher demand from China and other emerging markets. The ISO projects that the global sugar exports will increase by about 1 million metric tons in 2023/24, reaching a total of 66.1 million metric tons.
References:
https://apps.fas.usda.gov/psdonline/circulars/sugar.pdf
https://www.statista.com/statistics/273437/exported-amount-of-sugar-in-leading-countries/
https://www.statista.com/statistics/495966/sugar-exports-worldwide/
Essential Topics You Should Be Familiar With:
