The Peru sugar market was valued at US$500.857 million in 2020 and is expected to grow at a CAGR of 5.54% over the forecast period to reach a total market size of US$730.611 million in 2027.
Due to people consuming more food and beverages with added sugar these days the usage and demand for sugar have increased which is will play a role in the growth of the market. Also, these days people are preferring brown sugar over white sugar, which will bolster the demand for brown sugar and fuel the market growth further. Although some people are shifting to artificial sweeteners or low-calorie sugar which can restrain the market, Additionally, increasing investment and product innovation by major players coupled with new product launches may further bolster the growth of the market. Further, as the Peruvian economy improves, the demand for sugar is expected to increase, particularly for sugar-based beverages and confectionery products.
The production costs in Peru are expected to vary considerably, with fuel being one of the primary driving factors. According to a report by the Foreign Agricultural Services of the USDA, fuel utilization ranges from 5 to 90 gallons for every metric ton of sugar produced. Peru’s northern coast has an excellent atmosphere for growing sugar cane due to high temperatures and a lack of rain. Peru’s sugar cane is entirely surface irrigated, which allows producers to cut the supply of water at any time in order to obtain greater sucrose yields. The Government of Peru owns shares in two sugar mills, Pomalca and Tuman. These mills have not been able to find investment partners to finance improvements in efficiency. In an effort to encourage investment in these companies, the government has been auctioning its shares to interested private sector companies. In recent times, problems in these two companies have also generated social unrest and accusations of corruption.
Policies
Sugar is a commodity which is included in the Peruvian Price Band System. The Government of Peru reduced the additional duty assessed on sugar by the price band back in 2016 when it published the Supreme Decree 055- 2016-EF. As a result of this, the floor price of the band fell from $648 to $518, while the ceiling price decreased from $778 to $644. Further, The United States - Peru Trade Promotion Agreement included a five-year linear tariff reduction for glucose and fructose, which has now entered into force. These reductions started at a tariff level of 17% for glucose and 30% for fructose, with duty-free access achieved in the sixth year, in 2015.
Online channels to grow substantially
The growth of e-commerce In Peru is expected to drive sales through online channels of distribution. According to the ITA (International Trade Administration), the number of eCommerce transactions grew by 120% between February and March 2020. ECommerce accounted for 12.5% of credit card transactions between January and March 2020, growing to 45% by June 2020. Further, the average customer ticket increased by 48%, currently standing at an average of USD 67 per transaction. Thus, developments like these are expected to boost this segment of distribution.
Further, according to DataReportal, there were about 21.89 million internet users in Peru in January 2022, showing an increase of 1.1% between 2021 and 2022. Further, according to the data, internet penetration in the country stood at 65.3% in January 2022, with the number of mobile connections at a staggering 114.6% 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$500.857 million |
| Market Size Value in 2027 | US$730.611 million |
| Growth Rate | CAGR of 5.54% 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 | NORANDINO, Empresa Agroindustrial Pomalca, Coazucar SA, Agroindustrial Laredo SAA |
| Customization Scope | Free report customization with purchase |
Segmentation: