The Australia sugar market was valued at US$295.218 million in 2020 and is expected to grow at a CAGR of 2.06% over the forecast period to reach a total market size of US$340.589 million in 2027.
Sugar is obtained from either extracting the sugar beet or sugar cane plant, after that it can be made into different forms. Many industries these days are increasingly using sugar for different purposes such as bakery, confectionery, canned food, frozen foods, pharmaceuticals, and so on. Due to the increasing consumption of sugar by different industries and people, the demand and production of sugar have increased which will help boost the market growth. Additionally, increasing investment and product innovation by major players coupled with new product launches may further bolster the growth of the market.
Market overview and trends
According to the Sugar Nutrition Resource Centre in 2020, the Australian sugar industry is notably exposed to low prices of sugar because it exports most of its production and the government does not prop up the price with taxpayer funds, a practice which occurs in countries like the USA and Japan. The World Bank recognises sugar as being one of the most policy-distorted commodities of all and reform to remove protectionist policies in the export markets would be of significant advantage to the Australian sugar industry.
Further, according to the DAFF (Department of Agriculture, Fisheries and Forestry) of the country, most of the sugar produced in Australia is grown in Queensland constituting 85% of the total production with the rest in northern NSW. Sugarcane farms are largely family owned and operated, but the number of farms is becoming fewer and larger due to the acquisition of smaller farms to form larger farms with aim of achieving economies of scale. Adding to that, sugar is the number one agricultural crop in Australia by volume and the 18th most valuable agricultural product, generating about $1.1 billion in revenue each year. Further, according to DAFF, it is also the second-largest exporter of raw sugar in the world.
No taxes and government assistance to drive growth
While the Australian sugar industry does not benefit from government protectionism, it does receive government assistance in the form of funding for research and development. For instance, the industry received a sum of $92.9 million between 1997 and 2015 as funding and various other support along the value chain including tax concessions. Developments like these are thus expected to drive growth in the Australian sugar market.
Further, there are no taxes imposed on sugar by the government in Australia, which is further expected to drive unrestricted growth in the sugar industry. In 2021, the AMA (Australian Medical Association) proposed the government to implement a tax of AUD 0.40 per 100 grams of sugar, in order to cut down the consumption of unhealthy sugary products. However, this effort availed to no use. Thus, no taxes on the commodity is expected to drive the market in the projected period.
Online channels to grow substantially
The e-commerce segment is a booming sector in Australia, which is expected to drive the segment for online channels of distribution in the market. According to the ITA (International Trade Association), eCommerce spending in Australia in 2021 reached US$49 billion, rising up from US$38 billion in 2020. This substantial growth of eCommerce along with the presence of prominent players like eBay and Amazon is expected to drive the online distribution channel segment for the sugar market in Australia.
Further, according to DataReportal, there were about 23.6 million internet users in Australia in January 2022, showing an increase of 3.4% between 2021 and 2022. Further, according to the data, internet penetration in the country stood at 91% in January 2022, with the number of mobile connections at a staggering 123% of the total population. Thus, this growing internet population in the country is further projected to drive the online channel of distribution in the projection period.
COVID-19 Insights
The outbreak of the COVID-19 pandemic affected the market negatively. The pandemic resulted in the implementation of nationwide lockdowns and social distancing measures in the country, which affected the production, as well as the distribution of the crops to obtain sugar. Further, the lockdowns also mandated the shutdown of offline retail stores in the country, which are still a major source of distribution, thus making the market dip even further.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Report Metric | Details |
| Market Size Value in 2020 | US$295.218 million |
| Market Size Value in 2027 | US$340.589 million |
| Growth Rate | CAGR of 2.06% from 2020 to 2027 |
| Base Year | 2020 |
| Forecast Period | 2022–2027 |
| Forecast Unit (Value) | USD Million |
| Segments Covered | Form, Source, Use, And Distribution Channel |
| Companies Covered | Wilmar International Ltd, Isis Central Mill Company Limited, Mackay Sugar Limited, MSF Sugar Limited, Tully Sugar Limited |
| Customization Scope | Free report customization with purchase |
Segmentation: