Sugar industry: Difference between revisions

Enterprises dealing with sugar

The sugar industry subsumes the production, processing and marketing of sugars (mostly sucrose and fructose).^[1] Globally, about 80% of sugar is extracted from sugar cane, grown predominantly in the tropics, and 20% from sugar beet, grown mostly in temperate climate in North America or Europe.

Sugar is used for soft drinks, sweetened beverages, convenience foods, fast food, candy, confectionery, baked products, and other sweetened foods. Sugarcane is used in the distillation of rum. Sugarcane produces several valuable byproducts that play a significant role in supporting economic growth.

Globally in 2018, around 185 million tons of sugar was produced, led by India with 35.9 million tons, followed by Brazil and Thailand.^[2] There are more than 123 sugar-producing countries, but only 30% of the produce is traded on the international market.

The top 10 sugar-producing companies based on production in 2010:^[3]

The global sugar industry has a low market share concentration. The top four sugar producers account for less than 20.0% of the market.^[4]

The sugar industry engages in sugar marketing and lobbying, minimizing the adverse health effects of sugar—obesity and tooth decay—and influencing medical research and public health recommendations.^[5][6][7][8]

Table sugar (sucrose) comes from plant sources. Two important sugar crops predominate: sugarcane (Saccharum spp.) and sugar beets (Beta vulgaris), in which sugar can account for 12% to 20% of the plant’s dry weight. The plant material is separated to isolate the sucrose-rich portions. Purification of the sucrose exploits the good solubility of sucrose in water. After this aqueous extraction, a variety of tools and techniques allow further purification and production of solid forms suited for the markets.

In the case of corn syrup, the high fructose corn syrup is obtained by hydolysis of the starch from corn. This conversion, the starch is soaked in warm water in the presence of enzymes. Again, the processing exploits the high solubility of sugars in water.

Most cane sugar comes from countries with warm climates, because sugarcane does not tolerate frost. Sugar beets, on the other hand, grow only in cooler temperate regions and do not tolerate extreme heat. About 80 percent of sucrose is derived from sugarcane, the rest almost all from sugar beets.^{[citation needed]}

In mid-2018, India and Brazil had about the same production of sugar – 34 million tonnes – followed by the European Union, Thailand, and China as the major producers.^[9] India, the European Union, and China were the leading domestic consumers of sugar in 2018.^[9]

Since the 6th century BCE, cane sugar producers have crushed the harvested vegetable material from sugarcane in order to collect and filter the juice. They then treat the liquid, often with lime (calcium oxide), to remove impurities and then neutralize it. Boiling the juice then allows the sediment to settle to the bottom for dredging out, while the scum rises to the surface for skimming off. In cooling, the liquid crystallizes, usually in the process of stirring, to produce sugar crystals. Centrifuges usually remove the uncrystallized syrup. The producers can then either sell the sugar product for use as is, or process it further to produce lighter grades. The later processing may take place in another factory in another country.^{[citation needed]}

Sugarcane is a major component of Brazilian agriculture; the country is the world’s largest producer of sugarcane and its derivative products, such as crystallized sugar and ethanol (ethanol fuel).^[10]

Beet sugar producers slice the washed beets, then extract the sugar with hot water in a “diffuser“. An alkaline solution (“milk of lime” and carbon dioxide from the lime kiln) then serves to precipitate impurities (see carbonatation). After filtration,^{[clarification needed]} evaporation concentrates the juice to a content of about 70% solids, and controlled crystallisation extracts the sugar. A centrifuge removes the sugar crystals from the liquid, which gets recycled in the crystalliser stages. When economic constraints prevent the removal of more sugar, the manufacturer discards the remaining liquid, now known as molasses, or sells it on to producers of animal feed.

Sieving the resultant white sugar produces different grades for selling.^{[citation needed]}

It is difficult to distinguish between fully refined sugar produced from beet and cane. One way is by isotope analysis of carbon. Cane uses C4 carbon fixation, and beet uses C3 carbon fixation, resulting in a different ratio of ¹³C and ¹²C isotopes in the sucrose. Tests are used to detect fraudulent abuse of European Union subsidies or to aid in the detection of adulterated fruit juice.^{[citation needed]}

Sugar cane tolerates hot climates better, but the production of sugar cane needs approximately four times as much water as the production of sugar beet. As a result, some countries that traditionally produced cane sugar (such as Egypt) have built new beet sugar factories since about 2008. Some sugar factories process both sugar cane and sugar beets and extend their processing period in that way.

The production of sugar leaves residues that differ substantially depending on the raw materials used and on the place of production. While cane molasses is often used in food preparation, humans find molasses from sugar beets unpalatable, and it consequently ends up mostly as industrial fermentation feedstock (for example in alcohol distilleries), or as animal feed. Once dried, either type of molasses can serve as fuel for burning.

Pure beet sugar is difficult to find, so labelled, in the marketplace. Although some makers label their product clearly as “pure cane sugar”, beet sugar is almost always labeled simply as sugar or pure sugar. Interviews with the five major beet sugar-producing companies revealed that many store brands or “private label” sugar products are pure beet sugar. The lot code can be used to identify the company and the plant from which the sugar came, enabling beet sugar to be identified if the codes are known.^[11]

Minor commercial sugar crops include the date palm (Phoenix dactylifera), sorghum (Sorghum vulgare), and the sugar maple (Acer saccharum). Sucrose is obtained by extraction of these crops with hot water; concentration of the extract gives syrups, from which solid sucrose can be crystallized. In 2017, worldwide production of table sugar amounted to 185 million tonnes.^[12]

The United States sets high sugar prices to support its producers, with the effect that many former purchasers of sugar have switched to corn syrup (beverage manufacturers) or moved out of the country (candy manufacturers).^{[citation needed]}

The low prices of glucose syrups produced from wheat and corn (maize) threaten the traditional sugar market. Used in combination with artificial sweeteners, they can allow drink manufacturers to produce very low-cost goods.

Table sugar production in the 19th century. Sugar cane plantations (upper image) employed slave or indentured laborers. The picture shows workers harvesting cane, loading it on a boat for transport to the plant, while a European overseer watches in the lower right. The lower image shows a sugar plant with two furnace chimneys. Sugar plants and plantations were harsh, inhumane work.^[13]

The production of table sugar has a long history. Some scholars claim Indians discovered how to crystallize sugar during the Gupta dynasty, around CE 350.^[14]

Other scholars point to the ancient manuscripts of China, dated to the 8th century BCE, where one of the earliest historical mentions of sugar cane is included along with the fact that their knowledge of sugar cane was derived from India.^[15] By about 500 BCE, residents of modern-day India began making sugar syrup, cooling it in large flat bowls to produce raw sugar crystals that were easier to store and transport. In the local Indian language, these crystals were called khanda (खण्ड), which is the source of the word candy.^[16]

The army of Alexander the Great was halted on the banks of river Indus by the refusal of his troops to go further east. They saw people in the Indian subcontinent growing sugarcane and making “granulated, salt-like sweet powder”, locally called sākhar (साखर), (شکر), pronounced as sakcharon (ζακχαρον) in Greek (Modern Greek, zachari, ζάχαρη). On their return journey, the Greek soldiers carried back some of the “honey-bearing reeds”. Sugarcane remained a limited crop for over a millennium. Sugar was a rare commodity and traders of sugar became wealthy. Venice, at the height of its financial power, was the chief sugar-distributing center of Europe.^[15] Moors started producing it in Sicily and Spain. Only after the Crusades did it begin to rival honey as a sweetener in Europe. The Spanish began cultivating sugarcane in the West Indies in 1506 (Cuba in 1523). The Portuguese first cultivated sugarcane in Brazil in 1532.^{[citation needed]}

Sugar remained a luxury in much of the world until the 18th century. Only the wealthy could afford it. In the 18th century, the demand for table sugar boomed in Europe and by the 19th century it had become regarded as a human necessity.^[17] The use of sugar grew from use in tea, to cakes, confectionery and chocolates. Suppliers marketed sugar in novel forms, such as solid cones, which required consumers to use a sugar nip, a pliers-like tool, in order to break off pieces.^{[citation needed]}

The demand for cheaper table sugar drove, in part, colonization of tropical islands and nations where labor-intensive sugarcane plantations and table sugar manufacturing could thrive. Growing sugar cane crop in hot humid climates, and producing table sugar in high temperature sugar mills was harsh, inhumane work. The demand for cheap labor for this work, in part, first drove slave trade from Africa (in particular West Africa), followed by indentured labor trade from South Asia (in particular India).^[13][18][19] Millions of slaves, followed by millions of indentured laborers were brought into the Caribbean, Indian Ocean, Pacific Islands, East Africa, Natal, north and eastern parts of South America, and southeast Asia. The modern ethnic mix of many nations, settled in the last two centuries, has been influenced by table sugar.^[20][21][22]

Beginning in the late 18th century, the production of sugar became increasingly mechanized. The steam engine first powered a sugar mill in Jamaica in 1768, and, soon after, steam replaced direct firing as the source of process heat. During the same century, Europeans began experimenting with sugar production from other crops. Andreas Marggraf identified sucrose in beet root^[23] and his student Franz Achard built a sugar beet processing factory in Silesia (Prussia). The beet-sugar industry took off during the Napoleonic Wars, when France and the continent were cut off from Caribbean sugar. In 2009, about 20 percent of the world’s sugar was produced from beets.^[24]

Workers face low pay, debts, heat stress^[25] and chemical exposure.^[26][27]

Child labor has been reported in the sugar industry.^[25]

Sugar played a significant role in the Atlantic slave trade, driving the demand for labor on plantations in the Americas.

In 2022, U.S. Customs and Border Protection blocked imports of Central Romana sugar citing “information that reasonably indicates the use of forced labor in its operations”.^[28][29]

The Dalmia Bharat Sugar mill in Kolhapur, India allegedly locks underage girls into years of debt and forced labor, and pressure them into underage marriages and hysterectomies.^[30]

From August 25, 1917 to February 15, 1922, the United States Marine Corps was stationed in Cuba to protect American sugar interests.

The sugar industry played a role in the overthrow of the Hawaiian Kingdom.

Sugarcane is a very water intensive crop^[31] and irrigating sugarcane can contribute to water scarcity.^[32]

Wastewater and solid waste from sugar mills can pollute water.

ProPublica and The Palm Beach Post reported that sugar companies set fire to cane fields in Florida to rid the sugarcane of its outer leaves but the fires also release harmful smoke. Residents are suing sugar companies, alleging that pollution from cane burning damages residents’ health.^[33]

This section needs to be updated. Please help update this article to reflect recent events or newly available information. (January 2024)

One of the most widely traded commodities in the world throughout history, sugar accounts for around 2% of the global dry cargo market.^{[citation needed]} International sugar prices show great volatility, ranging from around 3 cents to over 60 cents^{[clarification needed]} per pound in the past^[update] 50 years. About 100 of the world’s 180 countries produce sugar from beet or cane, a few more refine raw sugar to produce white sugar, and all countries consume sugar. Consumption of sugar ranges from around 3 kilograms (6.6 pounds) per person per annum in Ethiopia to around 40 kg (88 lb) in Belgium.^{[citation needed]} Consumption per capita rises with income per capita until it reaches a plateau of around 35 kg (77 lb) per person per year in middle income countries.

Many countries subsidize sugar production heavily. The European Union, the United States, Japan, and many developing countries subsidize domestic production and maintain high tariffs on imports. Sugar prices in these countries have often up to triple the prices on the international market; today^[update], with world market sugar futures prices currently^[update] strong, such prices were typically double world prices.

World raw sugar price 1960–2014

Within international trade bodies, especially in the World Trade Organization (WTO), the “G20” countries led by Brazil have long argued that, because these sugar markets in essence exclude cane sugar imports, the G20 sugar producers receive lower prices than they would under free trade. While both the European Union and United States maintain trade agreements whereby certain developing and least developed countries (LDCs) can sell certain quantities of sugar into their markets, free of the usual import tariffs, countries outside these preferred trade régimes have complained that these arrangements violate the “most favoured nation” principle of international trade. This has led to numerous tariffs and levies in the past.

In 2004, the WTO sided with a group of cane sugar exporting nations (led by Brazil and Australia) and ruled illegal the EU sugar-régime and the accompanying ACP-EU Sugar Protocol, that granted a group of African, Caribbean, and Pacific countries receive preferential access to the European sugar market.^[34] In response to this and to other rulings of the WTO, and owing to internal pressures against the EU sugar-régime, the European Commission proposed on 22 June 2005 a radical reform of the EU sugar-régime that cut prices by 39% and eliminated all EU sugar exports.^[35]

In 2007, it seemed^[36] that the U.S. Sugar Program could become the next target for reform. However, some commentators expected heavy lobbying from the U.S. sugar industry, which donated $2.7 million to U.S. House and Senate incumbents in the 2006 U.S. election, more than any other group of U.S. food-growers.^[37] Especially prominent among sugar lobbyists were the Fanjul Brothers, so-called “sugar barons” who made the single largest^[update] individual contributions of soft money to both the Democratic and Republican parties in the U.S. political system.^[38][39]

Small quantities of sugar, especially specialty grades of sugar, reach the market as ‘fair trade‘ commodities; the fair trade system produces and sells these products with the understanding that a larger-than-usual fraction of the revenue will support small farmers in the developing world. However, whilst the Fairtrade Foundation offers a premium of $60.00 per tonne to small farmers for sugar branded as “Fairtrade”,^[40] government schemes such as the U.S. Sugar Program and the ACP-EU Sugar Protocol offer premiums of around $400.00 per tonne above world market prices. However, the EU announced on 14 September 2007 that it had offered “to eliminate all duties and quotas on the import of sugar into the EU”.^[41]

Several countries subsidize sugar.^[42]
Sugar subsidies have driven market costs for sugar well below the cost of production. As of 2019, 3/4 of world sugar production is never traded on the open market. Brazil controls half the global market, paying the most ($2.5 billion per year) in subsidies to its sugar industry.^[43]

As of 2018, India, Thailand, and Mexico also subsidize sugar.^[43]

This article needs to be updated. Please help update this article to reflect recent events or newly available information. (November 2023)

The U.S. Sugar program is the federal commodity support program that maintains a minimum price for sugar, authorized by the 2002 farm bill (P.L. 107–171, Sec. 1401–1403) to cover the 2002-2007 crops of sugar beets and sugarcane.

Originally designed to protect the incomes of the sugar industry-growers of sugarcane and sugar beets, and firms that process each crop into sugar – the program now prevents them from competing with producers of corn syrup sweetener. It supports domestic sugar prices by:

(1) making available nonrecourse loans to processors (not less than 18¢/lb. for raw cane sugar, or 22.9¢/lb. for refined beet sugar);

(2) restricting sugar imports using a tariff-rate quota, and

(3) limiting the amount of sugar that processors can sell domestically (under marketing allotments) when imports are below 1.532 million short tons.

Import restrictions are intended to meet U.S. commitments under the North American Free Trade Agreement (NAFTA) and Uruguay Round Agreement on Agriculture. Processor and refiner marketing allotments are set by USDA according to statutory requirements. Marketing allotments and new payment-in-kind authority are designed to help the USDA meet the no-cost-requirements to the federal government by avoiding the forfeiture of sugar put under loan. Other parts of the new program can include a storage loan program for sugar processors, and reduced (by 1%) the USDA interest rate charged on sugar loans.

The US sugar industry is characterized by price supports, domestic marketing allotments, and tariff-rate quotas.^[44] It directly supports sugar processors rather than farmers growing sugar crops.^[44][43] The US government also uses tariffs to keep the US domestic price of sugar 64% to 92% higher than the world market price, costing American consumers $3.7 billion per year.^[44] A 2018 policy proposal to eliminate sugar tariffs, called “Zero-for-Zero”, is currently (March 2018) before the US Congress.^[43][45] Previous reform attempts have failed.^[46]

The European Union (EU) is a leading sugar exporter. The Common Agricultural Policy of the EU used to set maximum quotas for production and exports, and a subsidized sugar sales with an EU-guaranteed minimum price.^[47][48] Large import tariffs were also used to protect the market.^[47] In 2004, the EU was spending €3.30 in subsidies to export €1 worth of sugar, and some sugar processors, like British Sugar, had a 25% profit margin.^[49]

A 2004 Oxfam report called EU sugar subsidies “dumping” and said they harm the world’s poor.^[49]
A WTO ruling against the EU quota and subsidy system in 2005-2006^[50] forced the EU to cut its minimum price and quotas, and stop doing intervention buying.^[47] The EU abolished some quotas in 2015,^[51][52] but minimum prices remain.^[51][53][54] Tariffs also persist for most countries.^[54] In 2009, the EU granted Least Developed Countries (LDCs) zero-tariff access to the EU market^[47] as part of the Everything but Arms initiative.^[48] As of 2014, the German company Südzucker was the largest sugar producer in the world.^[55] In August 2014, following Russia‘s ban on the import of Moldovan sugar under the free trade regime, Octavian Armașu, CFO of Südzucker Moldova, estimated that the decision could amount to commercial losses of about 250 million Moldovan lei (MDL) for the Moldovan sugar industry.^[56]