Sugar is considered the third exportable product of El Salvador. The importance of the sector is reflected in the Gross Domestic Product (GDP), in which it represents 2.7%, according to data from the Central Reserve Bank (BCR).
Currently, the sweetener is exported to 21 countries in the world. Sugar commercialization benefits countries where El Salvador has free trade agreements that include sugar quota access, such as CAFTA with the United States, the Association Agreement with the European Union, Taiwan, South Korea, and the United Kingdom.
Currently, the largest buyers of sugar include the United States ($34.8 million), Canada ($27.6 million), South Korea ($16.2 million), Haiti ($6.2 million), Spain ($5.5 million), and the United Kingdom ($5.2 million).
Other countries that have also been sweetened with the Salvadoran product are: Honduras, Nicaragua, Puerto Rico, Mexico, Taiwan, China, Italy, Greece, Ireland, Belgium, and Norway, among others.
This year, the natural sweetener trade has shown a good performance. According to the BCR, between January and May of this year, the sugar industry exported $117.1 million and a total of 243.1 million kilograms, according to the latest BCR report. Last year, sales to the different markets totaled $200.7 million, equivalent to an increase of 7.1% ($13.4 million) compared to the previous year.
Production has also had a good year. According to Julio Castro, executive director of the Salvadoran Council of Sugar Agroindustry (Consaa), until June 10 of this year, a total production of 807,478.93 metric tons of sugar was reported for the 2021-2022 harvest.
It has been a good harvest since a production of 799,827 metric tons was previously estimated.
Consaa stressed that the production figure of 807,478.93 metric tons is preliminary since it is still in the process of being audited to obtain a final figure.
Sugar is traded in three types of markets: it supplies the national demand made up of the industry and the final consumer; the preferential market that corresponds to the quotas assigned through international treaties or agreements; and the world market under non-preferential conditions.
It is in this world market where it depends on the ups and downs of the international ones because, like any commodity, prices are volatile, says Consaa.
In this scenario, since the beginning of February 2022, the international price of sugar has been on the rise. From $17.60 per quintal in February, it went to $20.27 in April, and reached $20 in May.
Currently, the international price of sugar is $18.86 per quintal in the world market.
“Some of the factors that influence this volatility are the impact of the pandemic and the global economic recovery, the variation in oil prices, and the rise or fall of production by the large sugar producers worldwide in countries like Brazil and India, among others,” Castro mentioned.
On the other hand, the main challenges facing the sugar sector are the improvement of productivity in the field that allows better agricultural yields, the search for new and better markets at the international level; and the implementation of new technologies, said Consaa.
The dynamism of the sector is observed in the port of Acajutla, where recently the ships that constantly move the product to the different international markets have arrived, such as the Patience Lake (33,600 metric tons); the Mai Tai (8,000 metric tons); Lyra Ships (29,000 metric tons); and the Cecilia (29,400 metric tons).