Sugar prices in Africa’s most populous country have risen to their highest level since 2017, thanks to a growing foreign exchange crisis, instability, and flooding disasters that have reduced output.
According to data from the National Sugar Development Council (NSDC), the average price of sugar increased 407 percent from NN323,900 per metric tonne in October 2017 to N1.64 million per metric tonne in October 2024.
A number of problems, including limited access to improved seedlings, escalating insecurity, and climate change, have made it difficult for sugarcane producers to boost output despite the high price of sugar.
Abubakar Aliyu, a sugarcane farmer in Kebbi State’s Gwandu Local Government Area, stated, “We are unable to expand because some of the hectares of land we cultivated on previously are no longer accessible owing to insecurity.”
“Floods have destroyed a major percentage of our cultivation, and it is now a yearly occurrence. Additionally, the cost of inputs continues to rise, and we still lack access to high-quality cane seeds,” he added.
He pointed out that despite the industry’s enormous potential, the government has not provided any support. He claims that as demand from nearby nations and domestic millers is growing, the nation’s sugarcane market is expanding.
“I receive supply requests from some of the nation’s sugar producers and export my sugarcane to Niger and the Benin Republic,” he stated.
According to the most recent data from NSDC, Nigeria’s sugar production increased from 6,843 metric tonnes (MT) in 2012 to 38,597 MT in 2019. This represents 2.75 percent of Nigeria’s 1.42 million metric tonnes of consumption during that time.
Due to farmers’ incapacity to boost output, Nigeria, the biggest nation in sub-Saharan Africa, imports 98% of its raw sugar. This element puts additional pressure on sugar prices, as does the nation’s declining foreign exchange rate.
Data from FMDQ indicates that since the country’s currency floated in June 2023, the value of the naira has dropped by around 70%, reaching N1,533 per dollar on Friday at the Nigerian Autonomous Foreign Exchange Market.
The cultivation of sugarcane in significant quantities is being hampered, according to Isa Useni, a sugarcane farmer in Lawfu hamlet in Mokwa Local Government Area in Niger State, by the effects of annual flooding and increased insecurity.
Useni observed that more farmers are growing cane as a result of the current commercial options for the commodity’s production. However, he pointed out that farmers are finding it more challenging to raise a large portion of the product due to climate change and growing insecurity.
“Unlike in the past, there is now a definite market for sugarcane. However, we are unable to boost our output because the locations where we previously grew sugarcane are now off-limits because of instability,” he said.
Access to land is being restricted by insecurity. Cane production and growth have been slowed down by this, as well as land ownership disputes and community hostility between host communities and operators.
Growing Imports
Imports of sugar have been rising consistently despite increased investments in the industry.
The Food and Agricultural Organisation (FAO) reports that, in terms of quantity, sweeteners are Nigeria’s second most imported agricultural product, after wheat.
The most populated country in Africa is the fourth-largest net importer of sugar. Its imports increased by 40.1 percent from 1.09 million metric tonnes in 2012 to 1.53 million metric tonnes in 2020.
The Nigeria Sugar Master Plan states that its output to demand ratio is 2.1 percent.
Additionally, the industry backward integration effort aims to change the perception that millions of dollars are still spent each year on sweetener imports.
Nigeria imported sugar for a staggering N582.3 billion in nine months, compared to N517.8 billion in 2023, according to data from the country’s Foreign Trade Report.
Bakeries and Confectionery
The constant rise in sugar prices has devastated the operations of bakeries and confectioneries, as sweetener is the second most important ingredient in baking.
The Association of Master Bakers and Caterers of Nigeria (AMBCN) claims that a number of bakeries have had to close as a result of the rapidly rising costs of sugar and other essential baking ingredients.
Jude Okafor, national secretary of AMBCN, disclosed that the rising costs of wheat and sugar, the two main materials used in our manufacture, have made things challenging for bakers.