Skyrocketing sugar prices have left Ishaq Abdulraheem with few choices. The Nigerian baker weighed his options and eventually decided to cut his production by half, as increasing the cost of bread would mean declining sales.
This is a reality many bakers in developing nations are facing as they cope with shortages in staples like rice, bans on food trade, and weaker currencies—all of which contribute to food insecurity. With the naturally occurring climate phenomenon El Nino, the war in Ukraine, and an increase of 55% in sugar prices in two months, poorer nations are struggling the most.
At the root of this crisis is the fact that sugar is needed to make bread, which is a staple for Nigeria’s 210 million people, and a cheap source of calories for many who are struggling to put food on the table. The United Nations Food and Agriculture Organization (FAO) is predicting a 2% decline in global sugar production in the 2023-24 season, translating to a loss of about 3.5 million metric tons.
Brazil is the world’s biggest sugar exporter, but its harvest will only help plug gaps later in 2024. Until then, import-dependent countries like Nigeria—which buys 98% of its raw sugar from other countries—remain vulnerable. The same 50-kilogram bag of sugar that Abuja traders like Abba Usman bought a week ago for $66 now costs $81, and as prices rise, his customers are dwindling.
It’s 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. 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.
Thailand reversed a hike in sugar prices within days, imposing price controls for the first time since 2018. This will discourage farmers from growing sugar by capping their income, preventing the industry from growing and open competition.
But looking ahead, Brazil’s harvest is forecast to be 20% bigger than last year’s. This boost to global supplies won’t come until March, however, because Brazil is in the Southern Hemisphere.
Meanwhile, the world now has less than 68 days of sugar in stockpiles to meet its needs. Indonesia, the biggest sugar importer last year, has cut back on imports, and China, the No. 2 importer, was forced to release sugar from its stocks to offset high prices domestically for the first time in six years.
For some countries, importing more expensive sugar eats up reserves of foreign currency like dollars and euros that also are needed to pay for oil and other crucial commodities. Kenya, which was once self-sufficient in sugar, now imports 200,000 metric tons a year from a regional trade bloc. A 50-kilogram bag of local sugar doubled in price to $60, leaving many struggling to make ends meet.
In Nigeria, the struggle of bakers is a microcosm of the effects of rising food and fuel costs, and the outsized impact of high sugar prices. Bread is often the only food poor households can afford, and when bakers have to raise bread prices, as they did by 15% earlier this year, some people go hungry.
The FAO is urging countries to focus on longer-term strategies, as well as to implement policies that will ensure a more equitable distribution of food. Nigeria announced a $73 million project to expand sugar infrastructure, and other nations may need to consider similar measures.
Skyrocketing sugar prices have left people around the world with few choices. But with governments, organizations, and individuals working together, we can help lessen the negative impacts of this crisis and ensure that everyone has access to the food they need.
