The sugar producing nations of Central America (CA)- Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama -have seen extraordinary production growth. Sugar production grew by 64% between2001 and 2014 (from 3.4 mln tonnes to 5.6 mln tonnes) making the region one of the most dynamic in the world. While sugar consumption on the isthmus increased by 45% during the same period, the exportable surplus still grew considerably - peaking at 3.7 mln tonnes in 2019. Substantial investments in capacity and infrastructure were made, especially during periods of high prices on the world sugar market. Low production costs, favourable weather conditions and easy access to the growth markets in Asia (and the preferential markets in the United States and Europe) helped export totals grow almost without interruption up to 2014. However, subsequently weather events, such as El Niño/La Niña, lower world market prices and more recently higher production costs have taken a heavy toll. Land constraints began to emerge with some independent growers switching out of cane. Mill capacity expansion stalled. To reduce costs, several mills were shut down with the sugarcane supply re-allocated to bigger units. In 2020, sugar production in the region dropped to 5.2 mln tonnes, a year-on-year decline for the first time in a decade, and the recovery in more recent cycles has yet to exceed the 2019 total. The CA sugar industry has, since the mid-2010s, seen a decade where production has plateaued, remaining close to an average level of 5.45 mln tonnes annually. At the same time, consumption has crept higher and the region’s exportable surplus has consequently been squeezed– with export volumes declining from 3.6 mln tonnes in 2015 to an average of around 3 mln tonnes over the past three years. A deep dive into all seven sugar industries is presented in this study, analysing industry structure, technical performance, key drivers and issues, with a view to understand potential sugar production and export availability over the remainder of this decade. Sugar is no longer the only focal point, and the region's leading companies are re-thinking their mid-to-long term strategies with a greater drive to further diversify into cogeneration, into biofuels where government policy is favourable, and into other product opportunities. There is real potential for sugar production to consolidate and grow modestly to around 6 mln tonnes by 2029/30, which, after taking into account projected consumption, leaves an exportable surplus of around 3.5 mln tonnes. This is clearly not a significant expansionary phase but instead some clawing back of area formerly under cane in an environment of higher world market prices, as well as industry investments and R&D to further bolster climate resilience and further boost field productivity and hone milling efficiency.
Introduction Part 1: Central America Sugar Industry (1) Production (2) Performance Indicators (2) Consumption Part 2: Central America in a World Sugar Context (1) Exports (2) Central Role of Preferential Trade Part 3: Value Adding and Diversification (1) Ethanol (2) Cogeneration (Biomass Power) Part 4. Country Reviews (1) Guatemala (2) El Salvador (3) Nicaragua (4) Costa Rica (5) Honduras Part 5: Conclusions and Outlook (1) Consumption (2) Production (3) Exportable Surplus