Nigeria’s sugar and sugar confectionery imports rose marginally year-on-year by 5.1 percent in 2019, after recording a consistent decline since 2016, a BusinessDay analysis shows.
According to data from the International Trade Centre (ITC), a multilateral agency that serves as a focal point for trade-related technical assistance, importation of sugar steadily reduced by 23 percent to $619.3 million in 2017 from $804.5 in 2016 and by 16 percent to $519.9 million in 2018, but rose by 5.1 percent to $545.7 million in 2019.
“The international sugar market is really tight because Brazil and India are not producing much unlike before, in which reduced production resulted in price pressure,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers, said.
Nigeria, one of sub-Saharan Africa’s largest importers of sugar, imports its raw sugar from countries such as Brazil and India. According to Food and Agriculture Organization (FAO), Sugar Price Index averaged 190.3 points in December 2019 from 168.6 points in September.
Read also: COVID-19: OCP Africa’s Agribooster set to support 75,000 farmers in planting season
“The rally in international sugar price quotations was prompted by rising crude oil prices, a situation that encouraged Brazil’s sugar mills to use more sugarcane supplies to produce ethanol instead of sugar, which resulted in reduced sugar availability in the global market,” the FAO report stated.
In the crop year of 2018/2019, Brazil produced approximately 29.5 million metric tons of sugar, a decrease of more than 24 percent in comparison to the previous year. This is the first time in the indicated period when then Brazilian annual sugar production stood below 30 million tons.
Emmanuel Ijewere, vice president, Nigerian AgriBusiness Group (NABG), noted that sugarcane production in Nigeria had a little challenge the year before which now cascaded into last year and that created a situation where there was a shortfall of the level of sugar.
“But I believe that Nigeria will import less this year because the COVID-19 has adjusted and reset a number of things. Nigeria will not be importing sugar except for specialised kinds, but a lot will be done to discourage it,” Ijewere said.
Sugar importation in Nigeria has been on a decline since 2016 till it picked up last year due to the Federal Government’s National Sugar Master Plan (NSMP), a policy roadmap for sugar production that was implemented in 2013 with the objective to achieve self-sufficiency in sugar production, save foreign exchange on the importation of sugar and ethanol, and establishment of 28 factories of varying capacities across the country, among others.
The policy provides a five-year tax holiday for investors in the country’s sugar added-value chain, a 10 percent duty, plus a 50 percent levy on imported sugar and a 20 percent, plus a 60 percent levy for imported refined sugar. It is aimed to produce around 1.79 million tons of sugar in 2020-23.
Experts believe that international sugar prices may be lower this year as Brazilian sugarcane mills are likely to accelerate a shift away from ethanol production to sugar in the upcoming season as sharply lower oil prices erode the competitiveness of the biofuel against gasoline.
