Global sugar prices rise after bad weather destroys crops in Asia

Skyrocketing sugar prices have left Ishaq Abdulraheem with few choices. Increasing the cost of bread would mean declining sales, so the Nigerian baker decided to cut his production by half.

For scores of other bakers struggling to stay afloat while enduring higher costs for fuel and flour, the stratospheric sugar prices proved to be the last straw, and they closed for good.

Sugar is needed to make bread, which is a staple for Nigeria's 210 million people, and for many who are struggling to put food on the table, it offers a cheap source of calories.

But surging sugar prices — an increase of 55 percent in two months — means fewer bakers and less bread.

“It is a very serious situation,” Abdulraheem said.

Sugar worldwide is trading at the highest prices since 2011, mainly due to lower global supplies after unusually dry weather damaged harvests in India and Thailand, the world's second- and third-largest exporters.

This is just the latest hit for developing nations already coping with shortages in staples like rice and bans on food trade that have added to food inflation.

All of it contributes to food insecurity because of the combined effects of the naturally occurring climate phenomenon El Nino, the war in Ukraine and weaker currencies.

Import-dependent countries

Brazil is the biggest sugar exporter, but its harvest will only help plug gaps later in 2024. Until then, import-dependent countries — like most of those in sub-Saharan Africa — remain vulnerable.

Nigeria, for instance, buys 98 percent of its raw sugar from other countries.

In 2021, it banned imports of refined sugar that ran counter to a plan to build up domestic sugar processing and announced a $73-million project to expand sugar infrastructure. But those are longer-term strategies. Abuja traders like Abba Usman are facing problems now.

The same 50-kilogram (110-pound) bag of sugar that Usman bought a week ago for $66 now costs $81. As prices rise, his customers are dwindling.

This rise is partly due to the El Nino, a natural phenomenon that shifts global weather patterns and can cause extreme weather conditions ranging from drought to flooding. Scientists believe the climate crisis is making El Nino stronger.

India endured its driest August in over a century, and crops in the western state of Maharashtra, which accounts for over a third of its sugarcane production, were stunted during the crucial growing phase.

And in Thailand, El Nino effects early in the growing season altered not just the quantity but also the quality of the harvest, said Naradhip Anantasuk, leader of the Thailand Sugar Planters Association.

He expects only 76 million metric tonnes (84 million US tons) of sugarcane to be milled in the 2024 harvest season, compared with 93 million metric tons (103 million US tons) this year.