World of sugar
The international sugar year runs from October to September
Sustainability
The global sugar industry is one of the world’s oldest agriculturally-based industries, which is estimated to produce around 184.2 million tons of sugar in the 2013/14 international sugar season.
Whilst many forces continually impact upon annual global production, a major sustainability feature of this industry is its historic and ongoing sugar consumption growth, which on average, increases by around 2% per annum. Africa, with its favourable agronomic conditions, has significant potential to contribute towards the production needed to meet this growing demand. Illovo, as a world-class, cost-competitive, highly-efficient sugar producer, operating in Africa, is wellplaced to participate in this ongoing growth opportunity. The following tables, graphs and data are intended to promote a broader understanding of the dynamic international circumstances in which the Illovo group operates.
Overview
More than 100 countries produce sugar, about 80% of which is made from sugar cane grown primarily in the tropical and subtropical zones of the southern hemisphere, and the balance from sugar beet which is grown mainly in the temperate zones of the northern hemisphere.
Generally, the costs of producing sugar from sugar cane are lower than those in respect of processing sugar beets. Currently, 67% of the world’s sugar is consumed in the countries of origin, whilst the balance is traded on world markets.
Source: Czarnikow Sugar
| World sugar production (million tons) | World sugar consumption (million tons) | |
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| World sugar production levelled off during the 2013/14 international sugar season after four consecutive years of strong growth. | Global sugar consumption growth continues to demonstrate steady growth of approximately 2% per annum. |
| Global sugar production surplus/deficit balance versus world sugar price |
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| World raw sugar prices have fallen over the past three years in response to a fourth consecutive year of global sugar production surplus. However, future prices are expected to benefit from a possible reduction in global supply, particularly out of Brazil due to drought conditions experienced in the centre-south cane growing region. |
| Top sugar producers 2013/14 estimate (South Africa is a member of the SADC) |
Top sugar exporters 2013/14 estimate (South Africa is a member of the SADC) |
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| Brazil and India combined account for around 36% of
global sugar production which is estimated at 184.2 million tons in the current 2013/14 international sugar season. |
Approximately 70% of total world sugar production is consumed in the country of origin. Brazil represents around 50% of global exports. |
| World raw sugar price (US cents/lb) | Preferential prices (free on board) (US cents/lb) |
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| World raw sugar prices have continued to trend downwards as the result of a multiple-year production surplus. | EU refined prices in the current year have corrected downwards in response to an over-supplied market and to a repositioning of EU sugar producers prior to the abolishment of sugar quotas in 2017. | ||
| Per capita consumption 2013/14 (kilograms per annum) |
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| As GDP growth across Africa continues to increase at a rate in excess of other developed economies across the globe, the prospect for enhanced levels of consumption growth on the continent remains positive. | ||||
The southern African sugar season runs from April to March
Southern African Development Community statistics
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Sugar production by country (million tons) | |
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| Sugar production across the SADC reflects good growth, with the estimated production of 5.8 million tons in 2013/14 international sugar season. | ||
| Export markets (million tons) | ||
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| Exports from the SADC region to Europe are still growing, while world market imports into the SACU region have displaced a significant quantity of sugar onto the world market. | ||
| Local consumption (million tons) | ||
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| Sugar consumption continues to demonstrate good growth with SADC sugar-producing countries contributing to a combined growth of around 3.4%. | ||
South African Custom Unions statistics
| Cane production (million tons) | Sugar production and markets (million tons) | |
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| Cane production in Swaziland remained relatively stable, while improved climatic conditions in South Africa led to a significant improvement in cane yield and sugar production. | On the back of improved weather conditions in South Africa, combined SACU production grew by 14%. |
South African statistics
| Cane production (million tons) | Sugar production and markets (million tons) | |
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| Cane production in Swaziland remained relatively stable, while improved climatic conditions in South Africa led to a significant improvement in cane yield and sugar production. | On the back of improved weather conditions in South Africa, combined SACU production grew by 14%. | |
| Consumer market sales (000 tons) | Industrial market sales ( 000 tons) | |
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| Local consumer markets were again negatively affected by the influx of duty-free imports, largely from Brazil. | Industrial market sales also felt the negative impact of increasing volumes of duty-free imports entering South Africa. |
Illovo group statistics
| Cane production (million tons) | Sugar production (million tons) | |
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| Adverse growing conditions in some areas reduced the cane crop by our own agricultural operations to 6.1 million tons (2013: 6.5 million tons) whilst total cane from independent farmers increased to 9.4 million tons (2013: 8.4 million tons), driven mainly by the full recovery from the recent years’ drought conditions in South Africa. | Increased throughput and improved performance in the South African mills and a full season of operation at the expanded capacity in Swaziland resulted in a 4.8% increase in sugar production over that of the previous season to 1.83 million tons, which is a production record from the current installed capacity. | |
| Refined sugar production (000 tons) | Raw material throughput (million tons/including outgrowers) |
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| Refined sugar production was lower than that of the previous season, with production in South Africa pulled back to match demand. | Around 60% of cane throughput provided by the group’s own agricultural estates and by private growers is cultivated under irrigation. Excluding South Africa, this proportion increases to 90%. | |
| Group markets (million tons) | Illovo share of industry production (%) | |
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| Approximately 58% of the group’s sales volume continues to be sold into the domestic markets where we produce sugar. In 2013/14, these sales amounted to 1.06 million tons, sold via a range of pre-packed and bulk industrial and direct consumption sugars in brown and refined sugar offerings. | Illovo remains a significant producer in each of the countries in which it operates. |