Price of sugar up by 30% since the beginning of the year

The futures contracts for sugar in the international market are currently hovering around $700 per ton, which is an increase of over 30 percent in the last five months and the highest level since December 2011. Additionally, sugar contracts have risen by about 150 percent since the minimum point in August 2019.

“This has led to the emergence of a new term: sugarflation. Confectioners are concerned about another factor that could affect the price of their products, but they cannot raise the prices of their baked goods because inflation is already affecting prices,” Daniel Kostecki, chief market analyst at CMC Markets Poland.

The rise in retail sugar prices will put pressure on the overall inflation outlook as it will directly impact the food and beverage industry, particularly the confectionery industry, which requires a lot of sugar. According to Kostecki, people in the industry believe that the high price of sugar does not immediately affect the cost of processed food due to long-term contracts, which often last for several years. However, there may be problems when existing supplies and previous contracts run out.

(WBJ)