Impact of Climate Change on Cane Sugar Supply
Sugar prices are soaring worldwide in part due to the impact of weather on sugarcane supply. Some major sugar producing areas are suffering from drought, others from flooding, and some from both. Due to the impact of global supply on “local” pricing, it is important to understand this impact and to learn more about solutions and initiatives being taken to mitigate this risk.
Sugarcane is grown in more than 100 countries, it’s vital to many national economies and millions of people depend on it for their livelihood. The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change
In its most recent report, the interactive atlas shows that some key sugarcane regions will suffer from more consecutive dry days, days with temperature above 35 degrees and less precipitation. This effects not just the crops, but also the people who work and live in these areas. Occupational heat stress is a growing problem and reductions of sugarcane yields could force people out of work which could lead to migration and poverty.
Thailand: Irrigation Slows Switch to More Drought Tolerant Crops
Small-scale sugarcane farmers like 43-year-old Mali Ditri face an increasingly difficult choice. Mali oversees 79 acres of farmland in the agricultural heartland of Nakhon Sawan province. The area got about 1,200 millimeters of rainfall in 2005, according to the Thai Meteorological department. In 2021 it got just 800 millimeters decreasing yields by 50%.
Mali has decided she can no longer bank on the weather and is turning to a new crop. About 70 percent of the land she once used for sugarcane farming is now planted with cassava, a more drought-tolerant crop.
The shunning of sugarcane is causing anxiety further down the supply chain. Nathapun Siriviriyakul runs the Kaset Thai International Sugar Corporation, which turns the cane into sugar, molasses, fertilizers and energy.
To encourage farmers to stay with sugarcane, the company built in 2017 a 15-kilometer irrigation channel to connect drought-prone farming areas to the Chao Phraya, one of Thailand's largest rivers. He says the effort has paid off — to an extent. They've helped farmers produce several more tons of cane than they would have been able to without the extra irrigation.
India: Heavy Rain Stops Cane Crushing
Sugar mills in India's top producing state Maharashtra are set to stop cane crushing 45 to 60 days earlier than last year as heavy rain has curtailed sugar cane availability, a senior state government official told Reuters last Friday. The western state of Maharashtra, which accounts for more than a third of the country's sugar output, could produce 12.8 million tons of sugar in the 2022/23 marketing year that began on Oct. 1, down from an earlier forecast of 13.8 million tons, Maharashtra's sugar commissioner Shekhar Gaikwad said. Lower sugar output could prevent the world's second-biggest exporter from allowing additional exports leading to rising sugar prices worldwide.
The Good: Growing Interest in Producing More Sugarcane Ethanol
But it’s not all bad news. Sugarcane plays a role in developing a low carbon economy. It is a source of renewable energy in the form of bioethanol, biogas, biomass and as a raw material for bioplastics and biomaterials. As a clean, affordable and low-carbon biofuel, sugarcane ethanol has emerged as a leading renewable fuel for the transportation sector. Ethanol produces up to 78% less GHG emissions compared to fossil fuels, performing better than any other liquid biofuel produced today on a commercial scale. Sugarcane ethanol has been a mainstream fuel in Brazil since the 1970’s and replaced over 3.20 billion barrels of gasoline between 1975 and 2020. Other countries are now establishing ethanol mandates towards a cleaner energy matrix for transport, such as China and India.
Though the challenges are many, key initiatives by almost all global companies to address the impact of climate change give us hope that innovation born of knowledge and purpose will keep the sector healthy.