…bakeries, confectioneries squeezed
The sugar price in Africa’s most populous country has surged to the highest level since 2017 owing to worsening foreign exchange crisis, insecurity and flooding incidents that have cut output.
The average price of sugar rose 407 percent to N1.64 million per metric ton in October 2024 from NN323,900 in October 2017, according to data from the National Sugar Development Council (NSDC).
In spite of the high sugar prices, sugarcane farmers have struggled to increase production owing to a combination of issues ranging from inadequate access to improved seedlings, worsening insecurity and climate change.
“We are unable to expand as some of the hectares of land we cultivated on before are no longer accessible owing to insecurity,” said Abubakar Aliyu, a sugarcane farmer in Gwandu Local Government Area of Kebbi State.
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“Floods have been destroying a large portion of our cultivation and it has become a yearly occurrence now. Also, we still do not have access to quality cane seeds and input prices keep surging,” he explained.
He noted that there has been no government support for the industry despite its huge potential. According to him, the market for sugarcane in the country is gaining momentum as demand from neighbouring countries and local millers continues to rise.
“I export my sugarcane to Niger and Benin Republic and get supply requests from some of the sugar producers in the country,” he said.
Sugar production in Nigeria has risen from 6,843 metric tons (MT) in 2012 to 38, 597 MT in 2019, according to the most recent data from NSDC. This accounts for 2.75 percent of Nigeria’s total consumption of 1.42 million metric tons for the period.
Nigeria, the largest country in sub-Saharan Africa, imports 98 percent of its raw sugar, owing to the inability of farmers to increase production. This factor, together with the country’s falling FX rate, further mounts pressure on sugar prices.
The naira has lost about 70 percent of its value since June 2023 when the country floated its currency, hitting N1,533 per dollar at the Nigerian Autonomous Foreign Exchange Market on Friday, data from FMDQ shows.
Isa Useni, a sugarcane farmer in Lawfu community in Mokwa Local Government Area in Niger State, said the worsening insecurity and yearly flooding’s impacts on sugarcane growing areas is hindering the production of the commodity in large volumes.
Useni noted that the present commercial opportunities for cane production are attracting more farmers to grow the commodity. However, he noted that worsening insecurity and climate change are also making it difficult for farmers to grow much of the commodity.
“There is now a guaranteed market for sugarcane, unlike before. But yet we cannot increase our production because places we usually cultivated sugarcane before are no-go areas due to insecurity,” he explained.
Insecurity is limiting access to land. This is coupled with communal hostilities and land ownership tussles between host communities and operators, which have retarded cane production and growth.
Imports on the rise
Amid increased investments in the sector, sugar imports have continued to rise steadily.
The sweetener is the second most imported agricultural produce in Nigeria in terms of quantity after wheat, according to the Food and Agricultural Organisation (FAO).
Africa’s most populous nation is the fourth net importer of sugar. It imported 1.53 million metric tons in 2020 from 1.09 million metric tons in 2012, a 40.1 percent rise in imports over the period.
It has a 2.1 percent ratio of production to demand, according to the Nigeria Sugar Master Plan.
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And yearly, millions of dollars are still spent on importing the sweetener – a narrative the industry backward integration programme hopes to change.
Nigeria spent a whopping N582.3 billion in nine months importing sugar compared to N517.8 billion expended in 2023, data from Nigeria’s Foreign Trade Report shows.
Bakeries, confectioneries squeezed
The continuous surge in sugar prices has crippled the operations of bakeries and confectioneries as the sweetener is the second most important ingredient in baking.
According to the Association of Master Bakers and Caterers of Nigeria (AMBCN), the skyrocketing sugar prices and other key baking materials have forced several bakeries to shut down operations.
“It has been difficult for bakers as prices of flour and sugar, the major ingredients in our production, have continued to surge,” Jude Okafor, national secretary of AMBCN, told BusinessDay.
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