About Food Market Series
Food Market is a series of articles published by researchers at Khazanah Research Institute (KRI) to analyse statistics related to some food items, intended to increase public knowledge and awareness on its production, trade and consumption. Other articles in this series are:
- Banana: The World’s Most Popular Fruit
- Soy: The King of Beans
These articles are short, informative and accessible to the public. It utilises publicly available data (unless stated otherwise). They are not meant to study food-specific markets in-depth or make any policy recommendations.
The views expressed in this article are entirely those of the authors. They do not necessarily represent the views of KRI.
Articles are available online at www.KRInstitute.org.
Views
This article is part of the Food Market series of articles at KRI’s website. It intends to provide a brief overview of the sugar supply and trade in Malaysia. Some insights are drawn for the benefit of the public; however, this article is not meant to offer an in-depth analysis or policy recommendations regarding the sugar market.
Executive Summary
Sugar production heavily relies on sugarcane as 80% of global sugar is produced from this crop, while the remaining is sourced from sugar beet. Some of the main producers of sugarcane are Brazil, India and China.
In 2013, the total sugar supply available for consumption in Malaysia was 43.0 kilograms (kg) per person, equivalent to 118 grams (g) of refined sugar per day or 24 sugar packets commonly found in fast food restaurants! This is nearly double the WHO’s recommendation of 15 kg to 20 kg per person per year, or 41.1 g to 54.8 g per day.
Unused sugar is stored in our body as fat. With increasingly sedentary lifestyles and the high levels of sugar consumed, obesity is a plausible outcome and might risk other cardiovascular and non-communicable diseases, such as type 2 diabetes. Currently, Malaysia is the fattest country in Southeast Asia.
Malaysia’s sugarcane production peaked in the 1970s, but has declined steadily. Sugar refining relies on imports of raw sugar, mainly from Brazil and Australia. Aside from supplying food-grade sugar to the domestic market, Malaysia also exports this product. The sugar market is still protected by many countries. Major players such as China and India impose more than 25% import tariffs of sugar products. Both developing and developed nations have some form of protectionism over their sugar industry.
Introduction
As Malaysians enjoyed the recent Hari Raya Aidilfitri celebrations, their happy smiles when they visited their family and friends were as sweet as the food served during these festivities. Sugary food is not uncommon in our daily diet. It is consumed directly as a sweetener, or added to other food items, whether we realise it or not. Recently, sugar has also been a discussion topic for many, as the Malaysian government announced a tax of 40 cent per litre on sweetened beverages in the 2019 Budget. The tax will be enforced in July 2019, postponed from its original enforcement date of 1 April 2019.
Granulated or table sugar that most households use as sweeteners consist of sucrose obtained from sugarcane or sugar beet. For nearly three millennia, sugarcane is the main source of sugar, but sugar beet replaced sugarcane’s dominance by 1880 in continental Europe. Today, sugarcane produces 80% of global sugar.
Did you know?
Sugarcane is a group of tall perennial grasses with sucrose-rich stalks. It has five broad species and is part of the Saccharum genus, commonly found in tropical zones. Meanwhile, sugar beet has sucrose-rich roots, and belongs to the Beta vulgaris species and typically found in temperate zones. Some countries cultivate both crops. In 2017, the top sugarcane producers were Brazil (39% of global sugarcane production), India (16%) and China (5%), while the top sugar beet producers were the Russian Federation (17% of global sugar beet production), France (11%) and Germany (11%).
Given the prevalence of sugar in our diets, the increase in demand and consumption of sugar is threatening the health of consumers, especially as it is affordable to the vast majority of the population, both in developed and developing nations. While certainly not the only factor, increased sugar intake may have contributed to the increasing incidence of overweight and obesity globally. In 2016, 52% of adults (aged 18 and above) globally were overweight and obese, corresponding to 1.9 billion adults. This epidemic affects developing nations hard, where both obesity and stunting rates are high, including in Malaysia.
Sugar Supply and Consumption in Malaysia
Figure 1 shows the supply per capita of sugar in Asia, Southeast Asia and Malaysia from 1961 to 2013. Supply per capita has increased in these areas since 1961. In Malaysia, annual sugar supply per capita increased from 30.0 kilograms (kg) per capita in 1961 to a peak of 53.4 kg per capita in 1997, before falling to 30.3 kg per capita in 2005 and then increasing again to 43.0 kg per capita in 2013, a 43% increase since 1961. Across Asia, Malaysia has the second highest per capita sugar supply, superseded only by Jordan at 45.9 kg per capita, and one of the highest globally (based on 2013 data).
To put these numbers into perspective, the sugar supply at 43.0 kg per person in 2013 is equivalent to 118 grams (g) of refined sugar per day, i.e. 24 sugar packets commonly found in fast food restaurants! This is nearly double the World Health Organisation’s (WHO) recommendation of 15 kg to 20 kg per person per year, or 41.1 g to 54.8 g per day. Additionally, other survey data suggests that Malaysians are consuming too much sugar. Taking into consideration high sugar content food items, Malaysians are estimated to have consumed about 153.9 g of sugar per day in 2003 (not just table sugar), way above the recommended levels. To be clear, having a large sugar supply per capita does not mean every individual consumes this much sugar. Some are used as input for the production of other food products which are sold domestically or exported. Moreover, the estimated amount is subject to errors, due to underestimation of population (if it excludes undocumented non-citizens) and memory recollection challenges during surveys.
As household incomes increase, the basket of food consumption increases in complexity, beyond consuming just staple carbohydrates such as rice and wheat. Figure 2 shows the positive relationship between a country’s gross domestic product (GDP) per capita and sugar supply per capita. This is not surprising, as previously poor households experiencing rising incomes and adjusting to times of stable food supply increase the variety and amounts of food consumed beyond just staple carbohydrates, including consuming more sugar. Interestingly, Malaysians consume more sugar than is expected of a country with its level of GDP per capita.
In some developing countries, high sugar consumption is due to the memory of food scarcity in the past. Households with access to more than enough food now may physically and mentally maintain the memory of previous food scarcity, so past experience of famine might affect present consumption. Even when food is plenty and stable, households are likely to feast and eat more to prepare for potential hardships, subconsciously overeating food, including sugar. Adults whose mothers experience famine and starvation during pregnancy are also more prone to obesity due to genetic and physiological factors.
While sugar is not the only cause of nutrition-related health issues, Malaysia’s higher than the recommended consumption of sugar is a cause for concern. Any excess sugar and carbohydrates consumed (broken down into simpler sugar by the body) over the dietary energy expenditure is converted into fats. Excessive amount of fats will interfere with the body’s ability to control blood sugar and other important functions, leading to incidence of obesity and diabetes. Sugar can also be as addictive as cocaine, examined in different experiments on test animals.
Malaysia is currently the fattest country in Southeast Asia and the sixth among countries in the South Pacific and West Asia in the Asia Pacific region. The prevalence of obesity in adults (above 18 years old) has increased from 4.5% in 1996 to 17% in 2015. Obesity among children also increased from 5.4% in 2006 to 11.9% in 2015, doubled in the span of a decade. Diabetes has also increased from 11.6% in 2006 to 17.5% in 2015. The prevalence of overweight adults is also similar for households with different incomes, with between 25% to 35% of households are overweight in each income cohort.
Box Article: What is sugar?
Granulated or table sugar is a type of sucrose, which is a disaccharide of glucose and fructose. Sugar is part of a family of nutrients known as carbohydrates, which is the main energy provider of the body. Examples of carbohydrates include cereals and starchy food, such as rice, wheat and potato.
When we eat carbohydrates, they will be processed into simpler forms of sugar and absorbed in the intestines. This process provides us energy to function as we work, walk and exercise.
If the amount of sugar in our body does not match the amount of energy we use, they will be stored as fats. This is why overweight and obesity are rising around the world as we live increasingly sedentary lives. High body fat is associated with obesity and many cardiovascular and non-communicable diseases, such as type 2 diabetes.
In 2016, a research paper analysed correspondence between the Sugar Research Foundation (now known as the Sugar Association), a sugar industry lobby group, and a group of researchers in the Harvard University School of Public Health. It revealed how the sugar industry influenced the scientific consensus on the causes of cardiovascular diseases, promoting fats, and not sugar, as the culprit. This later affected the United States (US) national dietary guidelines to emphasise lowering fat and lightly touching on sugar, which some suspected had triggered the obesity crisis in the US. These guidelines later influenced the drafting of guidelines worldwide. The latest US National Dietary Guidelines have rectified this issue, with the removal of the food pyramid, and greater emphasis on reducing sugars.
It is hard to estimate how much sugar we actually consume daily. Much of the sugar we take could be hidden in the food we eat, due to the sugar used in processed and cooked food. This underestimates the real level of sugar we consume.
In fact, there are many types of local sugars and sweeteners that Malaysians consume, beyond granulated sugar. Palm sugar, processed from certain palm tree flowers, including gula melaka (from the coconut tree) and gula apong (from the nipah palm tree) are examples of local sugars. The extent of the use of palm sugar compared to white sugar is unknown, but it is known that many Malaysian traditional dishes across different cultures use gula melaka heavily, from Malay sweet pastries (such as kuih bingka, onde-onde and the like) to Chinese pork trotters in vinegar. There are also efforts to cultivate alternative sweeteners in Malaysia, such as stevia, a natural sugar-free sweetener. The other hidden source of sugar is sweetened condensed milk, with large amount of sugar added to the milk. In 2003, Malaysians consumed on average 30 g of sweetened condensed milk per day, equivalent to 16 g of refined sugar.
Essentially, in addition to the high level of sugar supply per capita, we might also be concerned about the prevalence and amount of ‘hidden’ sugar in the food that we consume. It is also still unclear why Malaysia’s sugar consumption is at high levels—it might be the result of higher income, increasing preferences, sugar addiction, widespread presence of added sugars in our food and more typically, a combination of two or more of these factors. Further research into this topic might be needed to explain this trend.
Sugarcane production, refined sugar manufacturing and international trade
As a tropical country, sugarcane grows in Malaysia. Official data show that sugarcane was harvested from less than 2,000 hectares (ha) of land in the 1960s, with average production of 43,600 metric tonnes (MT). In the next three decades, the area harvested and production dramatically rose, before declining in the 2000s. The 1970s recorded the highest sugarcane production averaging annual growth rates of 38%, before dropping in the 1980s and 1990s at 8% and 3%, respectively. The highest recorded annual production was in 1995, when Malaysia produced about 1.6 million (m) MT of sugarcane. Starting year 2000, sugar production declined sharply—from more than 1.0 m MT in 1999 to about 30,000 MT in 2017.
Sugarcane production is now mainly in Johor (10,837 MT), Sarawak (3,863 MT) and Selangor (3,857 MT).
In earlier decades, domestic sugarcane was a key input for nation’s sugar refining activities as the rise of sugarcane production coincided with the emergence of sugar refinery companies owning sugarcane plantations. However, plantation activities dramatically declined in the 2000s. This could be associated with unfavourable weather conditions and eventual conversion of sugarcane plantations to other crops, such as oil palm and rubber. The remaining sugarcane plantations likely serve the demand for sugarcane consumption, for example in the form of sugarcane juice.
Malaysia has long been a net importer of raw sugar, processed by these refineries to make food-grade refined sugar. Over the years, Malaysia changed its status as net importer to a net exporter of refined sugar. Interestingly, the growth of its raw sugar deficit outpaced the growth of refined sugar surplus. This might indicate the growth of domestic demand for food-grade sugar, reflecting earlier observations on the increasing sugar supply per capita.
Did you know?
Sugarcane has been cultivated in New Guinea and neighbouring islands since before 1000 BC. The Indians are said to be the first to develop techniques to extract sugar from sugarcane. From India, sugar expanded to the rest of the world. Sugarcane is processed and refined to be granulated or table sugar. It produces other by-products too.
By-products of sugarcane
- Bagasse to be used as fuel; to produce paper, mulch and chemicals
- Filtercake to be used as animal feed, fertiliser and wax
- Ethanol to be used as biofuel alternative to gasoline
- Molasses consumed as food or to produce feed, ethanol, rum and other products
Once sugarcane is harvested, its juice is milled, strained, clarified using certain chemicals, evaporated and then crystallised. From these processes, aside from raw unrefined sugar, bagasse, filtercake and molasses are produced. The sugar then goes through several steps—affination, carbonation, several layers of filtration, evaporation, crystallisation—before they go through curing, drying, cooling, screening and packing. More molasses are produced, aside from food-grade granulated and confectionary sugars. Sugarcane juice can also be consumed, rather than processed into refined sugar. It is a popular drink in Malaysia and other countries.
The total import value of sugar-related products was about USD26m (RM79m) in 1961 and increased to USD912m (RM3.8b) in 2016. Our imports appear to move with global sugar prices, except in some years. In the past six decades, while the composition of sugar imports have been dominated by raw sugar, our exports are more diversified with food-grade sugar products such as refined sugar, confectionary sugar and other sugar products. Brazil and Australia are the major import sources for raw sugar, while Singapore, Indonesia and China are some of the main export destinations for our sugar products.
Conclusion
In 2013, Malaysia’s sugar supply available for consumption was as much as 43.0 kg per person, relatively more compared to other countries. However, the real amount of sugar consumed might be higher due to the prevalence of added sugar in our food. Excess sugar in our body is stored as fats, potentially leading to incidence of various diseases. To curb our love of sugary treats, Malaysia imposed a tax on sugary beverages; future studies on the outcome of this policy is especially significant, considering the linkages between higher sugar intake and negative health consequences. Sugar is also related to an important manufacturing activity (sugar refining), relying on imports of raw unrefined sugar—Malaysia is a net importer of raw sugar, although we are a net exporter of food-grade refined sugar. International sugar market is still among the most protected in the world. Some countries are attempting to liberalise, although not without facing significant challenges.
