Lower sugar prices are enabling some businesses in Nigeria to enhance their profit margins.
This situation follows the country’s importation of approximately 98,000 metric tons of sugar in March 2025.
Recent fundamentals indicated the sweet crop’s derivative has experienced a significant decline due to favorable weather conditions in Brazil.
The South American nation contributes about 70 percent of the global raw sugar supply. Nigeria allocates a substantial part of its foreign exchange to importing raw sugar from Brazil, with domestic consumption ranging from 1.4 to 1.6 million metric tons annually.
About 96 percent of Nigeria’s imported raw sugar comes from Brazil, which is processed in Nigeria’s three major sugar refineries owned by Dangote, BUA, and Golden Penny.
Favorable weather and low oil prices, which discourage Brazilian mills from redirecting a larger share of cane into ethanol, are impacting the white commodity.
Nigeria plans growing its Sugar Industry
Nigeria’s sugar market, valued at an estimated $2 billion, presents investors with a lucrative opportunity due to the strong and growing demand for domestic production.
The Federal Government initiated the Nigeria Sugar Master Plan II (NSMP II) to revitalize the country’s sugar industry through increased production, job creation, and the generation of electricity and ethanol.
The plan’s goals include producing 161 million liters of ethanol, generating 400 megawatts of electricity, and creating 11.6 million metric tons of animal feed. Identifying optimal land for sugarcane cultivation, boosting crop yields, and attracting over $4 billion in investment are essential components of the plan’s seven pillars, which encompass a more comprehensive diversification strategy.
The government advocated for 50,000 hectares of commercial farming to help achieve these targets. Approximately 70% of the anticipated production will derive from brownfield projects, which involve expanding existing sugar estates, while new sugar projects are also in consideration.
Major Sugar Producers Revamp Production
Sugar prices have been crashing for the past two months; last Friday, New York sugar futures reached a four-year low, and London sugar hit a four-year low. Prices are decreasing due to predictions of a global sugar surplus
The USDA projected that global sugar production for 2025–2026 would increase by 4.7% year over year (y/y) to a record 189–318 million metric tons (MMT), resulting in a global sugar surplus of 41–188 MMT, a 7.5% increase year over year.
- India, the world’s second-largest producer, faces a bleak outlook for sugar prices due to rising production levels. Citing increased planted cane acreage, India’s National Federation of Cooperative Sugar Factories forecasted last Monday that the country’s sugar production in 2025–2026 would rise by 19 percent year over year to 35 MMT. A robust sugar crop could result from anticipated abundant rainfall in India, adversely affecting prices.
- India’s Ministry of Earth Sciences predicted on April 15 that this year’s monsoon would be above average, with total rainfall expected to reach 105% of historical norms. The monsoon season in India spans from June to September.
The Indian government earlier announced it would ease restrictions on sugar exports, permitting its sugar mills to export one million metric tons of sugar this season. India has limited sugar exports since October 2023 to maintain sufficient domestic supplies.
- Thailand’s increasing sugar production is anticipated to put downward pressure on sugar prices. The country’s Office of the Cane and Sugar Board reported on May 2 that Thailand’s sugar production increased by 14% year-over-year to 10,000 MMT in 2024–2025. Thailand ranks third for sugar production globally and second for sugar exports.
Meanwhile, Africa’s richest man, Aliko Dangote, revealed plans for a historic sugar refinery project in the Bono Region that would boost the local industry and lower Ghana’s $162 million sugar import bill. The refinery in Kwame-Danso will process 12,000 tons of sugarcane daily across 25,000 hectares of irrigated farmland.
