Sugar: Extraction

Why every sugar mill sits beside its fields

Cane is a tropical grass that is replanted every few years and regrows from the stubble between plantings. Beet is a temperate root crop grown in rotation with cereals. Both must be processed soon after harvest, so mills sit beside the fields. Cane is crushed, the juice clarified and boiled down into raw sugar, and the leftover bagasse fuels the mill. Beet is sliced and the sugar diffused out in hot water. In Brazil, mills can tilt their juice between sugar and ethanol depending on relative prices.

Sugar comes from two plants. Cane, grown in the tropics, supplies most of it; beet, grown in temperate countries, supplies the rest (FAOSTAT counts 1.94 billion t of cane and 294 Mt of beet in 2024). Both must be processed within hours or days of harvest, so production is organised around the mill. The main economic split is between Brazil's flex mills, which can switch between sugar and ethanol, India's regulated mills, which pay a state-set cane price and face export quotas, and protected beet sectors in the EU, Russia and the US. Raw sugar is then either sold domestically as plantation white or refined in destination refineries.

Methods compared

How each method works

Mechanised cane harvesting feeds mills that run both a sugar house and a distillery. Each season mills set the 'sugar mix' according to sugar prices versus hydrous and anhydrous ethanol prices, which follow Petrobras petrol prices. Bagasse fuels the mill and exports power to the grid.

Lowest-cost exporter with fast switching, but output swings with weather in Sao Paulo and with fuel policy.

Farmers deliver cane to an assigned mill and are paid the Centre's fair and remunerative price (FRP) or a higher state advised price (SAP) in Uttar Pradesh and some other states. Mills make plantation white sugar, divert some juice and molasses to ethanol, and sell sugar under monthly release quotas, a minimum selling price and export quotas.

Large and growing, but costs are set by policy and the crop depends on the monsoon; exports need government approval.

Rainfed or irrigated cane delivered to mills that produce raws for export, often under long-term supply deals with refiners in Asia. Thailand is the second-largest exporter.

Close to Asian refiners, but exposed to El Nino droughts.

Beet is grown in rotation with cereals, lifted in autumn and processed in a single autumn-winter campaign. Slices are soaked in hot water, the juice purified and crystallised straight into white sugar. Sectors are protected by tariffs and quotas.

Makes white sugar directly and is close to consumers, but costs are higher than Brazilian cane and supply relies on protection.

Stand-alone refineries melt imported raw sugar, remove colour and impurities with carbonatation or phosphatation and ion exchange, and recrystallise it. Profit depends on the white premium, the spread between ICE No.5 white and No.11 raw prices.

Lets importers buy cheap raws, but margins swing with the white premium.

Who does it: global

Who does it: India

India is the second-largest cane grower (23.4% of world cane, 2024) and the largest sugar consumer. It switched from importer to swing exporter: 6.1% of world export value in 2024. Exports are allowed by annual quota, ethanol diversion is steered by administered prices, and the minimum selling price of Rs 31/kg has not changed since 2019.