Features International Sugar Journal

A year into Covid-19 – the global sugar industry continues to be resilient

While the “COVID-19 has already produced catastrophic social, economic, and public health consequences, with more than 107 million documented cases and 2.3 million deaths,”1 the global sugar industry has shown resilience and continues to proceed with business as usual. From the relative silence in the press, it is apparent that the CEOs of sugar companies have acted admirably in safeguarding the health and wellbeing of their employees, and in doing so, their businesses as well.

There’s no doubt that for some, structural changes to their operations catalysed by the pandemic, will be here to stay. Acceleration of mechanization of cane harvesting in Maharashtra, India as access to migrant labourers became an issue comes readily to mind. With the dust still settling, it is not clear how the disruptions to supply chain operations has affected factory operations and whether near sourcing will become more prevalent. Press reports during the height of the pandemic last year suggested that Kakira Sugar in Uganda will commence refining sugar to produce pharmaceutical sugar, rather than rely on imports that have been hit during the pandemic. According to the MD of one company supplying technology and services to the sugar industry and whose sales engineers have struggled to travel to meet contractual obligations, recently told me that “at the end of lockdown there will be quite a few casualties in the sugar machinery/engineering field. I know that some of the bigger players have shed a lot of jobs these past 12 months.“ At the virtual American Society of Sugar Beet Technologists event in early March ’21, a couple of senior executives from US beet sugar factories noted they had not been affected by the inbound supply of goods and services, but were certainly impacted by outbound distribution of their sugar products to their customers.

One silver lining during the pandemic has been that countries suffering from sugar smugglers impacting their local industries noted that the border closures checked this. In Paraguay, the mayor of Tebicuarymí, department of Paraguarí, Javier González pointed out in mid-November ’20 that during the Covid-19 pandemic lockdown over March-June when the borders became ‘waterproof’ due to military control, the local sugar companies witnessed record sales, “they sold 6 to 7 times more than what is sold today. Today all the sugar companies in Paraguay are selling 1,000 tons per month, at the time of the beginning of the quarantine 7,000 tons of legal sugar were sold in Paraguay”. On the flip side, border closures and supply chain disruptions impacted access to sugar in deficit countries driving up prices and decreasing demand in the emerging economies. The consensus amongst the industry analysts is that consumption will bounce back as artificial barriers recede as some semblance of normality returns.

One of the remarkable aspects of the COVID-19 pandemic has been that it has “led to major advances in the development and application of messenger RNA (mRNA) vaccines. It is stunning that science not only came up with a vaccine to a new pathogen so quickly but also advanced a brand new vaccine technology.”2 The beet sugar industry in the EU, hit by the ban on neonicotinoids can certainly do with the resources and collaborative input that produced the vaccines against Covid-19 in record time. A range of measures that plant pathologists are currently suggesting (with little conviction) are simply not going to be as effective.

At the outset, it is apparent that the sugar industry, served by fine leaders, has adjusted to the throes that the pandemic introduced.

Endnotes

1 Wayne C. Koff and Seth F. Berkley (2021) A universal coronavirus vaccine

Science, 371 (6531): 759 DOI: 10.1126/science.abh0447

2 H. Holden Thorp (2021) A little better all the time in 2021

Science,  371 (6524): 5 DOI: 10.1126/science.abg1951