Looking to Brazil for Insights on Sugar

The importance of sugar cannot be overstated, with its use in industries varying from food to energy. Sugar is a valuable material in the manufacture of bioplastics, sugarcane bagasse (for paper and electricity generation), bioethanol, acetone-butanol-alcohol (from molasses), and furfural (used to produce cement, herbicides and adhesives). 

Sugar-Producing Crops 

Sugar is sourced from sucrose-rich plants such as sugarcane, sugar beets, dates, stevia, and corn. Sugar beet production is prevalent in Russia and across Europe - as it is adapted to soils found in temperate zones of the Northern Hemisphere. While Brazil, the United States, China, India and African countries produce sugar from sugarcane, which thrives in tropical and subtropical climates and soil. Sugar beets and sugarcane remain the two most popular and widely bred sources of sugar globally.  

Brief Analysis of the Global Production of Sugar (2023) 

The world sugar market is estimated to be worth $46.4 billion in 2023 and is projected to hit $59.1 billion by 2028. Additionally, the African continent produced an estimated 94.28 million tonnes of raw sugar in 2021 alone. Africa recorded its highest-ever annual production of sugar in the year 2013 - just slightly above 97.88 million tonnes. However, the continent has experienced a progressive fall and rise in the quantity of sugar produced over the years, as shown below.  

An estimated 80 percent of global sugar production comes from sugarcane. Sugarcane is also acclaimed to be the world's most consumed crop. The remaining 20% is produced largely from sugar beets. More than 110 countries of the world are involved in sugarcane farming. Altogether, they contribute over 28.3 million hectares of land and have produced no less than 1.7 million tonnes of sugar worldwide as of 2022.      

It is also noteworthy that Brazil, India, Thailand, China, and the United States are the top 5 sugar-producing nations of the world. It is not uncommon that Brazil and India frequently compete to overtake each other in terms of annual production. See the figures below. 

Only 5 percent of the world’s sugar production comes from African nations - out of which about four-fifths come from Sub-Saharan countries. The top 10 producers of sugar in Africa as of 2023 are shown below. Egypt and South Africa occupy the top two spots and have consistently done so for some years now.  

Source:  InsiderMonkey; Yahoo Finance  

Brazil’s Massive Sugarcane Economy 

Brazil is notably the world’s leading producer of sugarcane and sugar and the second-leading producer of bioethanol worldwide (after the United States). The country possesses rich soil, tropical weather, and the world’s largest river basin, the Amazon, for irrigation.  

The Brazilian government established the IAA (Sugar and Alcohol Institute) in 1933 to promote the development of the sugar agroindustry. Progressive Industrialization of the country also increased the internal demand for sugarcane in two dimensions. First for sugar production; and then the increase in demand for bioethanol produced from sugar. The discovery of gasoline blended with ethanol gradually became a viable option for automotive fuels.

State governments and the federal government supervise and cooperate with stakeholders in the production, research and development programmes of the Brazilian sugar agroindustry. Universities and private research companies are prominent in research and development  

An example is the joint effort of the INPE (Brazilian Institute for Space Research) and the Canasat Project since 2003. They jointly map the cultivated sugarcane areas in Brazil’s South-Central region using free Landsat-type images (www.dgi.inpe.br). The project enjoys the support of the UNICA (Sugarcane Industry Union), CEPEA (Center for Advanced Studies in Applied Economics), the ESALQ/USP (Luiz de Queiroz College of Agriculture); and the CTC (Sugarcane Technology Center). 

Nigeria’s Sugar Production: Latest Developments (2023) 

In a bid to grow the nation's sugar industry,  Phase 1 of the Nigeria Sugar Master Plan (2012 to 2022) was approved by the federal government in 2012, and N170 billion was committed to its cause. The plan targeted a national production of about 1.79 million metric tonnes of sugar by 2023 - in the hopes of reducing dependency on foreign importation. Nevertheless, about N2.7 trillion worth of raw sugar was imported into Nigeria between 2012 and 2022. The records were sourced from the National Sugar Development Council and the National Bureau of Statistics. 

The first phase of the master plan appeared to have failed. Nevertheless, it birthed the establishment of three major sugar refineries in Nigeria: Dangote Sugar Refinery, BUA Sugar Refinery and Golden Sugar Refinery. As of 2023, the combined production capacity of the three sugar refineries is an estimated 3.5 million metric tonnes of sugar - double the current estimated national consumption.  

Thus, the Presidency launched another N30 billion infrastructure intervention into the Nigerian sugar production industry in 2022. The intervention to “accelerate sugar backward integration intervention projects”, is meant to service irrigation installations at six sugar plantations at these locations: Numan (Adamawa State); Sunti (Niger State); Lafiagi and Bacita (Kwara State); and Toto and Tunga (Nasarawa State).