Sugar prices are rising around the world after bad weather linked to the El Nino phenomenon destroyed crops in Asia

The sharp rise in sugar prices left Ishaq Abdel Rahim with few options. The increased cost of bread means lower sales, so the Nigerian baker decided to cut his production in half.

For dozens of other bakers struggling to stay afloat with endurance High fuel and flour costsstratospheric sugar prices proved to be the last straw, and they closed for good.

Sugar is essential for making bread, the staple food for Nigeria’s 210 million people, and for many of them Struggling to put food on the tableIt offers a cheap source of calories. High sugar prices – a 55% increase in two months – mean fewer bakers and less bread.

“The situation is very dangerous,” Abdul Rahim said.

Sugar is trading around the world at the highest prices since 2011, mainly due to reduced global supplies after unusually dry weather hurt crops in India and Thailand, the world’s second- and third-largest exporters.

This is just the latest blow to developing countries already dealing with it Shortage of basic foodstuffs such as rice And Ban on food trade That added to food inflation. All of this contributes to food insecurity due to the combined effects of naturally occurring climate phenomena Boy, War in Ukraine And weaker currencies. Wealthier Western countries can absorb the higher costs, but poorer countries struggle.

Fabio Palmieri said that the United Nations Food and Agriculture Organization expects a 2% decline in global sugar production in the 2023-2024 season, compared to the previous year, which means a loss of about 3.5 million metric tons (3.8 million US tons). , Researcher in the global commodity market at the Food and Agriculture Organization. Incredibly, sugar is used for Biofuels such as ethanolTherefore, global sugar reserves are at their lowest levels since 2009.

Brazil is the largest exporter of sugar, but its crop will only help fill the gaps later in 2024. Until then, import-dependent countries – like most countries in sub-Saharan Africa – remain vulnerable.

Nigeria, for example, buys 98% of its raw sugar from other countries. In 2021, it banned imports of refined sugar, which conflicts with a plan to build a domestic sugar industry, and announced a $73 million project to expand sugar infrastructure. But these are long-term strategies. Abuja traders like Abu Usman are now facing problems.

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

Othman said: “The price is rising every day, and we do not know why.”

This is partly due to El Niño, a natural phenomenon that changes global weather patterns and can cause extreme weather conditions ranging from drought to floods. Scientists believe Climate change makes El Nino stronger.

India experienced its driest August in more than a century, and crops in the western state of Maharashtra, which account for more than a third of its sugarcane production, halted during a crucial growing phase.

Sugar production in India is likely to fall by 8% this year, according to the Indian Sugar Mills Association. The world’s most populous country is also the largest consumer of sugar and is now restricting sugar exports.

Naradeep Anantasuk, president of the Sugar Growers Association of Thailand, said that the effects of the El Niño phenomenon at the beginning of the growing season in Thailand changed not only the quantity of the crop, but also the quality of the crop. Only 76 million metric tons (84 million US tons) of sugarcane are expected to be milled in the 2024 harvest, compared to 93 million metric tons (103 million US tons) this year.

A report from the US Department of Agriculture predicted a 15% decline in production in Thailand in October.

Thailand reversed rising sugar prices within days, imposing price controls for the first time since 2018. Anantasuk said this would discourage farmers from growing sugar by capping their income.

He added: “It’s like preventing the industry from growing, preventing open competition.”

Wholesale prices have been allowed to rise to help farmers cope with high costs – partly because of government demands not to burn their fields, which makes harvesting cheaper but shrouds much of Thailand in thick smog.

Looking ahead, Brazil’s crop is expected to be 20% larger than last year, said Kelly Gojari, senior research analyst at agricultural data and analytics firm Gro Intelligence. But since the country is located in the Southern Hemisphere, the boost to global supplies will not come until March.

This is due to favorable weather earlier this year in Brazil coupled with an increase in the areas where sugarcane is grown, according to the USDA.

The next few months are the biggest concern, FAO’s Palmieri said. Population growth He said that the rise in sugar consumption will increase pressure on sugar reserves.

The world now has fewer than 68 days of sugar reserves to meet its needs, compared to 106 days when it began to decline in 2020, according to USDA data.

“It is at its lowest levels since 2010,” said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute.

Indonesia — the largest importer of sugar last year, according to the U.S. Department of Agriculture — reduced its imports, and China, the No. 2 importer, was forced to pull sugar from its stockpiles to offset higher prices domestically for the first time in six years, Palmieri said. He said.

For some countries, importing expensive sugar eats up a lot Foreign currency reserves Dollars and euros are also needed to pay for oil and other basic commodities, said Mamoun Amrouk, an economist at the Food and Agriculture Organization.

This includes Kenya. Once self-sufficient in sugar, it now imports 200,000 metric tons (110,000 US tons) annually from a regional trading bloc. In 2021, the government restricted imports to protect local farmers from foreign competition, but reversed that decision as harvests shrank due to insufficient rains and poor management.

The amount of ground sugar in Kenya declined steadily from June to August. To compensate for this, monthly imports doubled from September to October. Meanwhile, the price of a 50-kilogram bag of local sugar has doubled to $60, said store owner Joseph Coraro.

Back in Africa’s largest economy, the struggle of Nigerian bakers is a microcosm of the effects High food and fuel costs The high price of sugar has a huge impact because it is spread everywhere. Many Abuja bakeries use sugar to sweeten cakes and to feed the yeast that makes the bread rise.

Bread is often the only food that poor families can afford. when Bakers raise bread pricesAs happened at 15% earlier this year, some people are going hungry.

Mansur Umar, president of the Nigerian Bakers Association, said not passing on the high costs was not an option.

“There’s no way you can buy high and sell low,” he said.

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Ghosal reported from Hanoi, Vietnam and Asado from Abuja, Nigeria. AP journalists Gintamas Saksurunchai in Bangkok; Evelyn Musambi in Nairobi, Kenya; Courtney Bonnell in London contributed to this report.

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