Industrial Sugar Market Research Report - Global Forecast till 2030

Impact of COVID-19 on the Global Industrial Sugar Market

The sugar industry has witnessed a disruption in its supply chain and input value chain, commencing from raw material procurement to processing, packaging, and distribution, owing to the COVID-19 pandemic. COVID-19 has had a negative effect on the industrial sugar market.  Trade restrictions and the closure of international borders/ports to curb the spread of novel coronavirus are the major factors contributing to the disruption of the supply chain. Declining demand for sugar from the application industries has resulted in a dip in sugar prices. Out-of-home sugar consumption has reduced since the outbreak of COVID-19. As the pandemic is progressing forward, the global economic recession is setting in, resulting in a reduced buying power among the customers.

Additionally, retail customers are focusing on their health and immunity, which in turn has negatively impacted the retail sales of chilled carbonated beverages and other high sugar products. Therefore, manufacturers of carbonated beverages have reduced their production volumes and reduced the procurement of raw materials, such as industrial sugar. As per the Food and Agriculture Organization (FAO), sugar prices have fallen by nearly 14.6% since March 2020. Another factor responsible for the declining prices of sugar is lowering crude oil price, which has negatively impacted the demand for ethanol from sugarcane.

Global Average Sugar Prices, February 2020-May 2020

Implementation of nationwide lockdown in several developing countries, including India, has resulted in the unavailability of labor to produce sugar and supply sugarcane, as most of the laborers have returned to their native states amidst the lockdown. Exports of industrial sugar have also been hit hard owing to the unavailability of labor, lack of public transport, low container traffic at the ports, and operations being conducted at the customs department with 5-10% capacity. Even though several countries are gradually lifting the nationwide lockdown and trade restrictions, a stabilized global economy and growth in the demand for industrial sugar is not expected to be witnessed anytime soon. To recover from the global pandemic and recession, many developing countries are likely to witness several daunting challenges in the next few years.

MRFR has identified a few potential challenges being faced by the developing countries while sustaining their economy amidst the global pandemic through its COVID-19 analysis tool. Potential challenges being faced by the developing countries are the lack of proper storage and transportation infrastructure, such as cold storage, and availability of labor.

Source: international Sugar Organization (ISO)