• Tuesday, May 28, 2024
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Nigeria’s average sugar price hits 5-year high

Nigeria’s average sugar price hits 5-year high

The average price of sugar in Nigeria has surged to its highest value in five years in December 2023, data from the National Sugar Development Council (NSDC) has shown.

The average price of sugar rose by 98 percent in the full year of 2023 to N1.2 million per metric ton in December 2023 from N625,000 in January, according to the data.

On a year-by-year basis, the average price of sugar surged 96 percent to N1.2 per metric ton in the last week of December 2023 from N631,200 in the corresponding period of 2022.

Today, Africa’s most populated country grapples with accelerating inflation, spearheaded by surging prices in food and beverages.

The average sugar price closed at N273,040 per metric ton in the last week of December 2019, a 354 percent increase in the same period of 2023.

White sugar which is a common household item has become white gold and many people struggle to afford it.

On a month-by-month basis, the average sugar price is N1.4 million per metric ton in January 2024, from N1.2 million in December 2023.

Dangote Sugar, and BUA Foods, two leading sugar producing companies in Nigeria, control over 95 percent of the sugar market.

However, Nigeria, the largest country in sub-Saharan Africa, still imports about 98 percent of raw sugar, which is then refined and sold. This factor together with the country’s falling FX rate, further mounts pressure on sugar prices.

Currently, the market price of 25kg of Dangote sugar is N31,000 and N30,000 for BUA sugar in Lagos respectively.

The fall of the naira to an all-time low of N1,455 to a dollar on Tuesday, January 30 2023 in the official trading market, indicates that there will be no respite in sugar prices anytime soon.

El Nino conditions set the stage for surges in global temperatures and disruptive weather and climate patterns. This can mean dry conditions in India, Thailand, Indonesia, the Philippines, and northern Australia, all major sugarcane-growing regions. These conditions have also impacted the prices of sugar globally.

Oyin Kolawole, a baker and biochemist who resides in the Iyana Ipaja area of Lagos, says baking has become more of a luxury than a profession.

“People don’t understand why cake will be expensive and when you try to consider, you end up not gaining much or running at a loss,” Oyin said.

She blames inflation on baking materials in which the price of sugar, a major ingredient in cake making, has surged from N400 per cup to over N1,000 and from N1,800 per congo to N3000 in 2024.

Coca-Cola Bottling Company, a top beverage brand, increased the price of its plastic bottled drinks at the beginning of the year to N300 from a steady price of N250 in 2023.

Personal sugar consumption is less than 20 percent, while industrial consumption by soft drinks, food and beverage sector, bakery and confectionery, and pharmaceutical industry is the largest, an NSDC survey report shows.

Nigerians should prepare to experience a surge in the prices of beverage products and pastries, where sugar is a paramount ingredient in production, the data shows.

A report has shown that El Nino’s condition in 2024 will not be better than 2023. India, a major world distributor of sugar, will experience seasonal droughts that will impact sugar cane production.

This report shows that sugar import-dependent countries like Nigeria must sort for other ways to produce or import its sugar, as India might not be able to sustain its sugar needs in 2024.

An El Nino weather pattern typically brings heavy rains to Brazil and drought to India, negatively impacting sugar crop production.

Until Nigeria takes matters into its own hands and seeks a way to improve its sugar production locally, sugar might continue to be white gold and the prices of beverages will continue to soar, experts say.

“Sugar price has skyrocketed,” a baker in Osogbo who sells cakes as a side hustle shared with BusinessDay.