Saudi Arabia Sugar Market - Forecasts from 2022 to 2027

The Saudi Arabia sugar market is expected to grow at a CAGR of 4.02% over the forecast period to reach US$464.846 million by 2027 from US$352.784 million in 2020. Sugar as a preservative, flavoring & coloring agent and sweetener among others has high applicability in the food & beverage sector, whereas in the pharmaceutical sector it is used as a bulking agent to add flavor and taste to medicines. Saudi Arabia is witnessing rapid urbanization which has improved people’s income and purchasing power parity. For instance, according to the World Bank, in 2021, the GDP Per capita of Saudi Arabia stood at US$23,585.9 which represented an increase of 16.7%. Such an increase is expected to boost the consumption of people for confectionaries, snacks, and non-alcoholic beverages thereby boosting the market demand for sugar in the Kingdom. However, the implementation of certain regulations by the Saudi government to reduce sugar content as per its healthy program can hamper the market growth. For instance, the Saudi Food & Drug Authority announced a ban on the usage of added sugar, color additives, and artificial flavors in mixed and fresh juices commencing from January 2020. Furthermore, the authority, in December 2019, started levying a 50% tax on drinks with added sugar and artificial sweeteners.

Based on industry vertical, the Saudi Arabia Sugar market is segmented into the food & beverage and pharmaceutical sectors. The food & beverage sector is expected to grow at a significant rate during the forecast period of the Saudi Arabia sugar market, owing to the rapid increase in the per capita consumption of food & beverage items in Saudi Arabia which is driving the demand for sugar in the Kingdom.

Bolstering growth of the food & beverage sector and growing super & hypermarkets will positively impact the sugar demand in Saudi Arabia. Rapid urbanization in Saudi Arabia has uplifted the living standard of the people and improved their scale of disposable income, owing to which the demand and consumption of food and beverage items have shown a significant increase in the kingdom. For instance, according to the Kingdom’s Small and Medium enterprise authority Monsha’at, in H1 of 2021, Saudi’s food & beverage sector recorded a growth of 6.3% in comparison to H1 of 2020. Moreover, besides the growing food & beverage sector, the growing establishment of supermarkets in Saudi Arabia is also projected to push the market demand for major grocery items such as sugar. For instance, in April 2021, Tamimi Markets which is a fast-growing supermarket chain in Saudi Arabia opened its 78th location in Malaz. Furthermore, Lulu Hypermarket, in February 2021, opened its 20th store branch in Jeddah, Saudi Arabia which is fully staffed by women and is spread across a 37,000 sq feet area. Such bolstering growth in the food & beverage will drive the demand for sugar in confectioneries and non-alcoholic beverages, whereas the growing establishments of super & hypermarket chains will provide a positive outlook to sugar demand as a grocery item, thereby augmenting the overall market growth during the forecast period.

Market Developments:

Cosumar Group, in March 2020, opened its new sugar refinery in Yanbu, Saudi Arabia which will have a nominal capacity of producing 850,000 tons of white sugar in different shapes. The refinery will target the industrial and retail segments in the Saudi Arabian market.

Covid 19

The lockdown restrictions to prevent the widespread COVID pandemic negatively impacted the consumption of sugar confectionary in Saudi Arabia as the closure of schools weaken the drive the demand for such products. Moreover, limitations on social gathering further hindered the consumption scale of sugar items which overall negatively impacted the sugar industry in Saudi Arabia. However, with the government showing ease in the restrictions the market is projected to show positive growth in the future.

Market Segmentation:

By Type

• White Sugar
• Brown Sugar
• Confectioner Sugar
• Cane Sugar
• Others

By Crop

• Sugarcane
• Sugar beets

By Form

• Liquid
• Solid

By Distribution Channel

• Online
• Offline

By Application

• Preservative
• Texture Modifier
• Sweetener
• Flavoring & Coloring Agent
• Bulking Agent
• Others

By Industry Vertical

• Food & Beverage
• Pharmaceutical