While we agitate at the massive upheaval Covid-19 has had in our lives and work – not that its throes are over yet – with the end game in sight, for the many harking to reset their lives, there is a palpable comfort. The announcement from three companies of potentially effective vaccines, developed in the remarkably short time frame of 11 months, demonstrates the power of political will and collaborative engagement between scientists to produce a cure given the resources to do so. Unlike the previous global pandemics, the death toll from Covid-19, even on an absolute scale, is likely to be markedly less. The Black Death, peaking in Europe between 1347 and 1351, caused by the bacterium Yersinia pestis, is estimated to have killed 75 million – 200 million – half the entire population. From January 1918 to December 1920, the Spanish flu, caused by a virus — which appears to have moved from birds to humans — infected an estimated 500 million people – equating to 1 in 3 people on Earth – killing approximately 50 million worldwide1. While there is no template to guide the recovery in the post-pandemic world, it is worth taking stock of the impacts in the sugar industry – which of these will be enduring and which transitory?
Arguably, one of the greatest casualties of the pandemic has been the truth – the relative ease with which analysts, brokers, traders have sought to pronounce on consumption trends from the flimsiest of evidence or lack of balanced assessment embracing and reflecting upon on the range of factors at play – essentially, speculation filling the vacuum left by the information that can be corroborated. In March, Czarnikow in a short piece (253 words)2 kickstarted this trend by suggesting that the pandemic will result in global sugar consumption decreasing in the current 2019/20 season by 2 million tonnes. Despite admitting that their assessment is “not wholly scientific” the likes of Reuters gave the piece fuel through widespread publicity. At a webinar on 29th April by LMC International, the analyst Gareth Forber suggested that “demand may fall by 5 million tonnes or more” due to the collapse in out-of-home food and drink consumption from closed restaurants and food outlets above along with “the prospect of weaker/negative GDP growth” reducing “growth prospects in developing countries”. A small sugar refiner in the UK observed that “At Ragus, we have seen that while demand for sugar out of home has dramatically decreased, demand for sugar has increased for industrial consumers making foodstuffs for home consumption.” In a relatively detailed comment piece3 in this journal citing press reports from emerging and developing economies, the picture was more nuanced – that consumption was hit first by supply chain disruptions resulting in relative access. This was exacerbated by opportunistic pricing from the reduced supply.
Disruption to supply chains impacting access to capital inputs (e.g. fertilizers, crop protection chemicals) to farmers and spare parts to factories have not been well documented in the press, but anecdotal evidence suggests that these have affected production. Press reports from China indicated that timely access to agricultural inputs before the planting season was an issue. Further, due to travel restrictions, vendor sales engineers have been unable to visit sugar mills, survey sites for new equipment orders, construction supervision, commissioning, and training. Even though the pandemic is driving companies to digitize many activities, as Tim Milne (Sugar Technology International) pointed out in the editorial in September4 “Zoom, Skype or other online meeting platforms can take you so far but at the end of the day, nothing beats 30 minutes in a sugar factory discussing a problem and finding possible solutions with the factory engineers.”
Perhaps one change afoot, catalysed by the pandemic, is the trend towards mechanized harvesting increasing in India. According to Prakash Naiknavare, Managing Director, National Federation of Cooperative Sugar Factories, “mills in Maharashtra have already placed orders for about 200 harvesters and a similar trend is seen in Karnataka and Gujarat where mills are dependent on cane cutters”. The pandemic has hampered the mass movement of cane cutters from one place to other. Contractors who sign contracts with mills and cane cutters have found it difficult to get labour as many don’t want to leave their villages due to the fear of Covid-19.
For sugar industries vulnerable to dumping from illegal imports, there was some respite when the borders were closed during the pandemic. As the mayor of Tebicuarymí, department of Paraguarí (in Paraguay), Javier González pointed out that during the Covid-19 pandemic lockdown during 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 – 1,000 tons per month.”
2 Ben Seed (2020) Coronavirus and sugar consumption Ben Seed