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Supply Chain Characteristics that Impact Traceability

Traceability Takeaways

  • Sugarcane from different producers, including multiple out growers, is often mixed at mills and refineries. Because the quality and taste of sugar is largely the same regardless of its source, sugar from multiple origin countries may also be mixed at various supply chain points.1Kiezebrink, Vincent, et al. Bittersweet. Sustainability issues in the sugar cane supply chain. SOMO, December 2015, www.somo.nl/bittersweet/. This suggests the need for product tracking approaches like bulk commodity or mass balance that do not require full product segregation.
  • Downstream traders and buyers have significant power in sugarcane supply chains and will therefore have a key role to play in driving more sustainable purchasing and production practices.2Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf.

Nature of Labor Rights Risk/Vulnerable Workers

Forced Labor or Trafficking in Persons cited by U.S. Government

Child Labor cited by U.S. Government

Risk of Forced Labor or Trafficking in Persons cited by other source

Risk of Child Labor cited by other source

Documented presence of migrant workers

Documented presence of other vulnerable workers

Documented presence or significant likelihood of third-party labor recruiters

Features of Production and Supply Chain

Large numbers of dispersed, unorganized, or informal small producers or other worksites

Multiple points of aggregation, co-mingling, and/or transformation across supply chain

Complex/opaque supply chains and/or lack of vertical integration

High degree of flexibility in procurement practices of downstream entities

  • Smallholder farms account for about 40 percent of sugarcane production. The other 60 percent of global output comes from operations that are vertically integrated from cultivation to mill.28Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf. The sugarcane sector often involves family-owned companies that have links to the government. This is detrimental to supply chain transparency as these family businesses are often unlisted.29A living wage throughout the cane sugar supply chain. Bonsucro, 9 December 2021, bonsucro.com/wp-content/uploads/2021/12/Position-paper-road-map-Living-wage-cane-sugar-supply-chain.pdf.
  • The origins of sugar products tend to be difficult for buyers to ascertain. Since the quality and taste of sugar does not vary significantly between points of origin, sugar from different plants and geographic origins is mixed together during the refining process.30Kiezebrink, Vincent, et al. Bittersweet. Sustainability issues in the sugar cane supply chain. SOMO, December 2015, www.somo.nl/bittersweet/.
  • Companies import raw sugarcane in bulk. The sugarcane is exported from large shipping terminals that mix sugar from several mills, making it difficult to trace the commodity back to individual mills. When cane sugar is purchased for direct consumption by consumers, meaning that it is not further processed, it is delivered in bags that can be traced back to specific mills.31Quiroz, Diana, et al. The Sugarcane Value Chain in Latin America and Asia. CNV Internationaal, 5 May 2021,  www.profundo.nl/download/cnvi-2106.
  • The upstream supply chain is highly fragmented. The presence of multiple actors and tiers, as well as the extensive use of out growers in the supply chain poses an obstacle to traceability. Different stages of production can also take place in a variety of locations; cultivation and processing are sometimes vertically integrated, but refining usually occurs in a different location.32Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf.
  • Industry sources report that buyers are seldom interested in knowing the origins of the sugar they purchase.33Kiezebrink, Vincent, et al. Bittersweet. Sustainability issues in the sugar cane supply chain. SOMO, December 2015, www.somo.nl/bittersweet/. Since the quality of the sugar varies negligibly between sources, traders and buyers can switch suppliers easily.34Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf.

Distribution of Labor Risk in Various Production Areas

Scale or nature of risk varies significantly based on geographic area of production

Scale or nature of risk is strongly associated with certain types of suppliers/entities

Scale or nature of risk is present across multiple tiers or nodes of supply chain (including in associated downstream or upstream goods)

  • The risk of child labor is largely dependent on the sugarcane production method used in different countries. In countries where sugarcane is produced on large-scale, mechanized plantations, such as Australia and the United States, child labor has not been widely reported. In many emerging economies, sugarcane is produced on small and medium-sized family farms, where child labor is more likely to occur.35Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf.
  • Forced labor and child labor risk is higher in sugarcane cultivation that uses forms of manual or non-mechanical labor.36Quiroz, Diana, et al. The Sugarcane Value Chain in Latin America and Asia. CNV Internationaal, 5 May 2021,  www.profundo.nl/download/cnvi-2106.
  • Child labor risks may manifest in sugarcane harvesting, which is conducted primarily by hand cutting, and in sugarcane milling and processing.37Commodity Atlas. Sugar. Verite, verite.org/project/sugar-3/. The two main activities that are potentially hazardous in sugarcane cultivation are the application of agrochemicals and manual harvesting.38Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf.

Linked Upstream and Downstream Risks

Risk in Nodes in Sugarcane Production

Approximately 80 percent of global sugar comes from sugarcane. Sugarcane is grown in 100 countries; however, 70 percent of global sugar production comes from just ten of those countries. Only about 30 percent of sugar produced is traded internationally.39A living wage throughout the cane sugar supply chain. Bonsucro, 9 December 2021, bonsucro.com/wp-content/uploads/2021/12/Position-paper-road-map-Living-wage-cane-sugar-supply-chain.pdf.


Cultivation of sugarcane takes place on farms or plantations, where the sugarcane is planted and harvested. Sugarcane can be harvested by hand or by machine; machine harvesting is typical on larger-scale estates with access to capital, while hand harvesting with machetes is more common on smallholder farms and plantations. After the harvest, sugarcane must be quickly transported for processing, as it deteriorates rapidly in this state. At sugar mills, sugarcane is processed and raw sugar is created. Mills often own plantations but will also purchase sugarcane from surrounding small and medium farms. The raw sugar is then transported to refineries. The refining process takes a long time, so sugar refining companies can source their raw sugar from all over the world.40Kiezebrink, Vincent, et al. Bittersweet. Sustainability issues in the sugar cane supply chain. SOMO, December 2015, www.somo.nl/bittersweet/. After sugar has been processed, wholesalers and retailers can sell it.41Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf. Sugar may be sold as consumer sugar, or it may be used in a variety of confectionery products. It is also sold as an ingredient in soft drinks and alcoholic beverages or in ethanol for industrial buyers.42Commodity Atlas. Sugar. Verite, verite.org/project/sugar-3/. On average, around 75 percent of sugarcane is used to produce sugar and around 22 percent to produce ethanol.43Quiroz, Diana, et al. The Sugarcane Value Chain in Latin America and Asia. CNV Internationaal, 5 May 2021,  www.profundo.nl/download/cnvi-2106.


Commodity traders are the agents that link upstream and downstream operations.44Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf. Depending on the degree of integration, traders can be involved in the transport, storage, and trade of raw sugar between mills and refineries, nationally and internationally, as well as the trading of refined sugar to buyers. Some traders operate their own mills and refineries.45Child labour in the primary production of sugarcane. International Labour Organization, May 2017, www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_ipec_pub_29635.pdf. Sugar purchasing is highly concentrated: as of 2019, six companies bought a combined share of around seven percent of global sugarcane production.46Quiroz, Diana, et al. The Sugarcane Value Chain in Latin America and Asia. CNV Internationaal, 5 May 2021,  www.profundo.nl/download/cnvi-2106.

Farm/Plantation

Mill

Refinery

Wholesale/Retail

Associated Downstream Goods and Consumer Sectors

Food and Beverage

Sugarcane is used in the production of baked goods and many other types of processed foods. Sugarcane is also used in the production of alcoholic beverages and many other types of processed drinks.

Top Global Countries

  1. Brazil47List of exporters for the selected product in 2021. Product: 170114 Raw cane sugar, in solid form, not containing added flavouring or colouring matter (excluding cane sugar of 170113). ITC Trade Map, 2021, www.trademap.org/Country_SelProduct.aspx?nvpm=1%7c%7c%7c%7c%7c170114%7c%7c%7c6%7c1%7c1%7c2%7c1%7c1%7c2%7c1%7c1%7c1.
  2. India
  3. Thailand
  4. Mexico
  5. El Salvador
  6. Guatemala
  7. Eswatini
  8. South Africa
  9. Cuba
  10. Colombia
  1. Brazil48Crops and livestock products. Food and Agriculture Organization of the United Nations, www.fao.org/faostat/en/#data/QCL.
  2. India
  3. China
  4. Pakistan
  5. Thailand
  6. Mexico
  7. Indonesia
  8. Australia
  9. United States of America
  10. Guatemala

 

Examples & Resources: Traceability Efforts Associated With Sugarcane

Footnotes