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Ingredients in Focus is Food Dive's bite-sized column that highlights interesting developments. In the material sector.
Brazil, the world's largest sugar exporter, is experiencing unprecedented fires in its sugarcane fields, and as a result, consumers are facing not-so-sweet price increases.
Ingredients Prices surged 4.2%. The fire disrupted the entire supply chain. Brazil's largest sugar group, Raizen SA, estimated that about 1.8 million tonnes of sugarcane, including that received from suppliers, were damaged by the fires, equivalent to about 2% of the total expected harvest for 2024/25, according to Reuters.
The severity of this year The fire could become much more serious. According to a Bloomberg interview, 2021 will be more than before. Mauro Virgino, Albéan's head of trade information.
On August 29, the material hit its highest price in five weeks.. and About 80,000 hectares Last week, a sugarcane field burned down.That's just over 1 percent of the 7.65 million hectares of Center-South sugarcane area, according to data from Orplana, the sugarcane growers' association.
The fires have been another negative for the world's largest sugarcane producer.
“Environmental issues resulting from climate change present significant challenges to the future of the sugarcane industry,” Ofir Adon, chief business officer of crop supply intelligence company Agritask, said in an emailed statement to Food Dive. “These include droughts that reduce yields, extreme heat at night that slows sugar accumulation, increased pest and disease infestation, and heavy rainfall that increases the risk of flooding and soil degradation.”
The cane sugar market is already struggling as more and more consumers turn to alternative sweeteners.
According to a HealthFocus International report, most consumers (55%) are concerned about their sugar intake, and reducing sugar intake is the biggest dietary trend worldwide.
To meet consumer demands, products such as sweet proteins, stevia leaf extract, and monk fruit are being introduced.
Although direct land damage from the fire was minimal, Experts said the plant would still lose sugar. Production from burned fields is expected to increase next year, Reuters reports. According to AgNews, sugarcane is typically regrown about five times before being replanted, at significant cost to producers. Some fires have destroyed fields that have already been harvested.
“The supply disruption will also affect sugarcane by-products. Bagas Used in electricity generation, methanol further impacts the profitability of sugar refineries. Adon said, 'In the long term, companies will need to invest in weather-resistant technologies to manage this volatility.”
sugar cane sugar market According to data from Maximize Market Research, it is expected to surpass $2 trillion by 2023 and grow at a CAGR of 1.3% during the forecast period to 2030.
“Sugarcane milling is highly regionalized due to high transportation costs and time sensitivity, so sourcing sugarcane from nearby areas can be difficult,” Ardon said. “If one mill is shut down due to weather, nearby areas are often similarly affected. However, suppliers, particularly trading companies, can source sugar from other areas or countries where sugarcane production is less affected by weather issues.”
Of the world The largest producer of sugarcane is Brazil.This product is also produced in other countries including India, China, Pakistan and Thailand.
Cane sugar is not the only ingredient that has been affected by environmental factors recently.
Coffee, cocoa and olive oil all face the same problem: Supply chain issues have become widely known in recent months, and some companies have gone so far as to use technology to replace ingredients they traditionally include in their products. For example, Voyage Foods Chips and melted wafers without cocoa.
Vanilla also faces a decline in supply. Flooded fields in the largest production area As a result, food companies have had to look to other regions such as Indonesia and Mexico.
