KSA Sugar Market Outlook to 2030

KSA Sugar Market Overview

• The KSA sugar market was valued at USD 398 million, driven by growing domestic consumption, the expanding food and beverage industry, and government initiatives to improve local production capacities. The market has been supported by the increased demand for sugar from various sectors, including processed foods, beverages, and the hospitality industry. Additionally, the countrys ongoing efforts to reduce dependency on sugar imports and boost self-sufficiency have further propelled market growth.
• Key players in the KSA sugar market include Savola Group, United Sugar Company, Olayan Group, and Al Reef Sugar Refinery. These companies have strengthened their position in the market through strategic investments in refining technology, efficient supply chain management, and a focus on meeting domestic demand.
• The Western region of Saudi Arabia, particularly Jeddah, led the sugar market due to its substantial industrial capacity, favourable logistics infrastructure, and proximity to key port cities. This regions dominance is further supported by large-scale sugar refining facilities that cater to both domestic and export demands.
• In 2023, United Sugars Corporation was renamed to United Sugar Producers and Refiners Cooperative. The newly formed United Sugar Producers and Refiners Cooperative reported record sales in 2023, selling 62 million hundredweight of sugar, which is the highest amount ever sold by the cooperative.

KSA Sugar Market Segmentation

The KSA sugar market is segmented by product type, end-user, and region.

• By Product Type: The market is segmented into raw sugar, refined sugar, and brown sugar. In 2023, refined sugar dominated the market due to its widespread application in the food and beverage industries.

• By End-User: The market is segmented by end-user into industrial, retail, and food services. In 2023, the industrial segment dominated the market, accounting for the largest share due to the substantial use of sugar in the manufacturing of processed foods and beverages.

• By Region: The market is geographically segmented into North, South, East, and West Saudi Arabia. In 2023, the Western region led the market, driven by the regions strong industrial base and well-established refining infrastructure.

KSA Sugar Market Competitive Landscape

• Al Reef Sugar Refinery Co.: Al Reef Sugar Refinery Co. is set to begin construction on its SAR 1.2 billion Jizan refinery, with a 1 million ton capacity, creating 500 jobs. The project aligns with Saudi Vision 2030 to boost food security and local production.
• Al Khaleej Sugar Co.: Al Khaleej Sugar Co. aims to increase production at its Jebel Ali refinery to 1.5 million tons in 2023, up from 600,000 tons in 2022. The refinery's normal capacity is 1.5 million tons, with 85% of production exported, primarily to East Africa and the Middle East.

KSA Sugar Market Analysis

KSA Sugar Market Growth Drivers:

• Rising Demand from Food and Beverage Industry: The food and beverage industry in Saudi Arabia is a major consumer of sugar, accounting for a substantial portion of the country's total sugar consumption. In 2021, per capita sugar consumption reached 28.9 kg in Saudi Arabia, indicating a substantial demand for sugar across various food and beverage products..
• Increasing Per Capita Sugar Consumption: Per capita sugar consumption in Saudi Arabia reached 28.9 kg in 2021, potentially increasing due to changing dietary habits and urbanization. Studies found that 45.8% of female students consumed sweets daily, while 40% of university students drank soft drinks once daily, with 27.5% consuming them two or more times daily.
• Population Growth: Saudi Arabia's population increased from 24 million in 2010 to 32.2 million in 2022, reflecting a growth rate of 34.2%. By 2030, the population is projected to reach around 36 million. This growth drives higher sugar demand due to increased consumption of food and beverages.

KSA Sugar Market Challenges:

• Dependence on Sugar Imports: Saudi Arabia continues to rely heavily on sugar imports, with over 1.8 million metric tons imported in 2023 to meet domestic demand. This dependency exposes the market to fluctuations in global sugar prices and potential supply chain disruptions, affecting local producers and consumers alike.
• Climate Impact on Sugarcane Cultivation: Saudi Arabias arid climate poses major challenges for large-scale sugarcane cultivation. The country experiences a projected decline in precipitation, which can lead to reduced agricultural productivity. A study indicates that a mere 1-degree Celsius increase in average temperature can decrease crop yields by 525%.

KSA Sugar Market Government Initiatives:

• Agricultural Development Fund (ADF): In 2023, the Agricultural Development Fund (ADF) introduced two initiatives worth SAR 2.5 billion to support farmers and enhance food security. This funding aims to facilitate local agricultural production and improve supply chains, contributing to the country's food security strategy.
• Saudi Food Security Strategy: The Saudi Food Security Strategy aims to boost local agricultural production and reduce food import dependency. In 2023, the Agricultural Development Fund approved SAR 1.5 billion to support various sectors, including sugar, as part of a broader SAR 37.5 billion plan for sustainable agriculture.

KSA Sugar Market Future Market Outlook

The KSA sugar market is poised for steady growth over the next five years, driven by the rising demand for processed foods, beverages, and confectionery products. Government initiatives aimed at increasing domestic production and reducing reliance on imports will further enhance market growth.

Future Market Trends:

• Adoption of Low-Calorie Sugar Alternatives: In the coming years, consumer preference for healthier food options is expected to drive demand for low-calorie sugar alternatives in Saudi Arabia. This trend aligns with Vision 2030 health objectives, which aim to improve public health and reduce sugar consumption, prompting companies to introduce new product lines catering to health-conscious consumers.
• Expansion of Sugar Refining Capacity: Over the next five years, Saudi Arabia is expected to expand its sugar refining capacity through private and public investments. The Durrah Sugar Factory, inaugurated in 2023 with a capacity of 900,000 tons annually, reflects the commitment to increasing domestic production and reducing reliance on imported sugar.