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Global sugar consumption will fall by nearly 2m tonnes (1%) this year compared to 2019, due to coronavirus lockdowns.
This means sugar consumption per capita will also fall.
Consumption will not recover fully until life can return to normal in affected countries; at the moment this looks like being in 2021 at the earliest.

Total Consumption Falls

We expect global sugar consumption to fall by 2m tonnes this season.
This is the first time we’ve seen a year-on-year sugar consumption decline since 1980, when raw sugar prices hit 45c/lb.

This is a reversal of the recent trend, where consumption was growing in line with population, by 1% every year.

We have reduced our consumption estimates for countries where lockdown measures are in place by up to 5% for the year.
However, sugar consumption is hard to forecast accurately so we will continue to adjust our estimates as we receive more information.
We believe the decrease of out-of-home sugar consumption (in bars, restaurants, theatres, etc.) will be larger than the increase of in-home sugar consumption.
Soft drink sales have been particularly affected by the abrupt end to social gatherings outside the home.

Coca Cola Report Sales Volumes are Down 25% in April

At this early stage, we forecast sugar consumption to rebound next season.
However, we think it will fall short of the pre-coronavirus 1% growth per year trend line.

For everything to return to ‘normal’ in our pre-coronavirus lives, there needs to be some form of herd immunity, either because enough people have caught the virus, a safe and effective vaccine has been developed, or because the virus has disappeared.
It seems this won’t happen in 2020 (or perhaps even in 2021) and the effect of the virus on the world’s economy will be profound for the coming months and years.
Until then, it is unlikely that people will be happy to visit pubs, bars, cafes, restaurants and coffee shops in the same way they did before.
Many premises may operate on takeaway-only basis.
Others will have a reduced capacity so they can offer better distancing measures for staff and customers alike.
We will probably see similar effects at concerts, cinemas, sporting events, festivals and theatres.
Footfall is likely to be lower as consumers stay away to avoid the risk of infection too.

Scenes From the Past

This means the drop in out-of-home food and beverage consumption we’ve seen in countries under lockdown will continue even if lockdown is lifted.

2019/20 Still Faces a Large Production Deficit

Despite the decline, sugar consumption will still exceed production by 7m tonnes in the 2019/20 season.
This is largely because of cane crop shortfalls in India and Thailand.
This deficit is well-known around the sugar market and we think is already priced in with raw sugar close to 10c/lb.

Stay up-to-date with all these changes using the Balance Sheet Changes tool in the Interactive Data Section.

Ben Seed

Ben joined CZ’s analysis team in 2016 on a year long internship before returning to the University of Bath to complete an Economics Degree. Since re-joining in August 2018, Ben has led the data insights team in expanding the range and quality of data available internally and to clients through CZ App. Ben spent 3 months in CZ’s Singapore and Bangkok offices to expand his knowledge of the region and help roll out the latest data processes. He is now also responsible for the Sugar Market View published each week on CZ App.