Industry Trend Analysis - African Sugar Producers To Struggle Following EU Quota Lapse - AUG 2017

BMI View: The sugar deficit in Africa will widen, as low international prices, the loss of the EU market and disappointing growth in regional consumption provide few incentives to invest. Governments of sugar-producing countries will instead focus on protecting their small internal markets from import-competition. Ethiopia is the main exception to this trend, and is expected to become a major sugar exporter over a five-year horizon.

We are forecasting shrinking surpluses and increasing deficits in sugar for most Sub-Saharan countries over a three year horizon, in line with the historical trend. Production is expected to remain stagnant for the following reasons:

  • African exports to the EU market are at risk of being displaced when EU production quotas lapse in September 2017, as several African producers are uncompetitive with European producers of beet sugar.

  • African Sugar Deficits Will Widen
    Sugar Consumption (LHS) and Production (RHS), average % growth year-on-year 2013-2017
    Note: The figures above represent the 10 largest consumers of sugar (70% of African consumption) and the ten largest producers of sugar (78% of African production) in Africa. Source: USDA

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