The average price of sugar in Nigeria increased by 103% in the first quarter of 2024 compared to the same period last year.
According to data from the National Sugar Development Council (NSDC), the average price of sugar doubled to 16.76 million naira per tonne in the first quarter of 2024 from 8.24 million naira per tonne in the corresponding quarter of 2023. 103 percent applies.
Experts say the country imports about 98% of its sugar needs and blame the sharp increase on the depreciation and instability of the naira.
In the Nigerian Autonomous Foreign Exchange Market, also known as the official market, the naira has depreciated by 191 percent since June 2023, further increasing exchange pressure on sugar millers who depend on cane sugar imports.
Sugar prices have fallen globally in the international market. The FAO Sugar Price Index fell 7.5% to 117 points in May, down from 127 points in April. This marks the third consecutive month of decline, with the index down 25.5% (40 points) year-on-year and trading at its lowest level since January 2023.
“Good weather conditions in Brazil helped the new harvest get off to a good start, contributing to an improvement in the global supply outlook,” the UN said in the report.
“On its own, this easing in raw sugar prices is expected to have a positive impact on raw material costs for DANGSUGAR. However, we remain mindful of potential pressures from domestic macroeconomic challenges, including exchange rate fluctuations and high inflationary pressures,” it said.
Moreover, improved harvests in Brazil, Nigeria’s largest trading partner for cane sugar imports, have led to a fall in global sugar prices, while exchange rate fluctuations and inflation continue to drive up product prices locally.
An anonymous source told Business Day that American Cola, another Nigerian beverage brand, increased the price of its 12-pack of cola last year from N3,150 to N3,250 in 2024, citing rising sugar prices and other prevailing economic conditions.
Coca-Cola Bottling Company, a leading beverage brand, increased the price of its bottled drinks to N300 from a flat N250 for 2023 at the start of the year. However, it has now increased the price again by 17 percent to N350 in response to the situation.
Similarly, PepsiCo, another beverage brand, has also announced plans to increase the prices of its products by 29.5 percent from 3,190 naira to 4,130 naira for the regular RGB pack, citing the current economic situation.
An NSDC survey report shows that while individual sugar consumption is less than 20%, industrial consumption is highest in soft drinks, food & beverages, bakery & confectionery, and pharmaceutical industries.
