Sugar inflation worries the sweets supply chain. Prices doubling, consumer alert

Ice creams and snacks risk being more bitter for consumers, due to probable waves of price increases that risk overwhelming sugar and, downstream, the dessert chain.

There is a number that represents the problem well: one thousand euros per ton. This is it, according to the report of the Bloomberg, the equilibrium point around which producers and buyers are reasoning, in view of the 2023-2024 harvest season which will start in October. However, there is one small detail: it is a price level that is more than double compared to the middle of last year, note the sources familiar with these negotiations.

The sector comes from a season battered by drought and the bogeyman is that now this could happen again. Sugar production in the 2022-2023 season decreased by 12%, one million tons below the initial EU estimates (at 14.6 million).

The financial agency notes that the impact has not been the same for everyone: the large companies have somehow managed to parry the blow, thanks to the long-term contracts with which they source, while the medium-sized and small pastry shops have had to deal with a +58% growth in spot market prices. The alarm is now high, also because the rains have delayed this year’s planting by about a month and rising temperatures have increased the risk that drought and pests will spread more rapidly and devastate small-scale beet crops. sugar.

Analysts consulted by Bloomberg clearly say that the next 2-3 months will be crucial. Low stock levels and the climate threat put production giants such as the German Suedzucker and the French Tereos among those who predict high prices and the risk is therefore that this time – with contracts adjusted upwards – the burden will completely pass on to consumers . “We are not at the end of sugar price inflation in Europe,” said Yury Sharanov, president of CIUS, an advocacy group representing both sugar consumers and industrial buyers in Europe. At the community level, we are clinging to a positive harvest from Poland to estimate that we can return above 15 million tons of production, even if others say that the result will not be achieved also due to viruses affecting crops.

Obviously, the news is not the best for end consumers either. Just a couple of months ago, an analysis by Altroconsumo remarked that the cost per kilo of sugar had increased, perhaps without us realizing it given that in absolute value it remains low: we are talking about a +60% within a year, on the shelves of supermarkets, hypermarkets and discount stores. “If in March 2022 a kilo of beet sugar cost us an average of 0.86 euros today – said the association in mid-May – it costs us 1.36 euros. And its price is in continuous but constant growth if we consider that compared to February the shelf price has increased by another 1.1%”. Among the reasons for the increases, also the ever greater dependence of Italy (and of Europe in general) on other sources: in addition to the drought, the farmers have made a calculation of convenience and the beet soils have given way to those of cereals .