the FAO Sugar Price Index It was almost 10 percent higher in September than in August. Thus, this index reached its highest level since November 2010.
This is mainly because there are harvest concerns in important sugar-producing countries such as Thailand and India, according to the Food and Agriculture Organization. The Food and Agriculture Organization says that these countries are experiencing drier weather due to the El Niño climate phenomenon, which will lead to lower harvests.
But this does not immediately mean that sugar and products containing sugar will become much more expensive here, believes Theis Geiger, food sector economist at ING.
Sugar prices have already risen sharply
He explains that sugar prices have indeed risen sharply recently, but the FAO sugar price index consists of several indicators. The price of sugar on major futures markets New York And London It is now slightly below the peak it reached a month and a half ago.
Moreover, the sugar beet crop in Europe is expected to be very good, adds Doriana Melenkova. She is an analyst at Rabobank and specializes in agriculture and sugar.
In addition, Brazil’s sugar harvest is good. Brazil is the world’s largest sugar exporting country. Therefore, Melenkova believes that we should not expect another increase in sugar prices in Europe. The price of sugar in Europe has remained at a high but stable level since the beginning of this year, according to Geiger.
Grab sugar for cookies
Economist Geiger says sugar producers will quickly outpace the rise in the price of sugar in the price of a packet of sugar. This will be a little slower for products that require more processing steps, such as cookies and chocolate.
“Producers may still have sugar stocks that they bought at a lower price, or contracts to buy sugar at lower prices are still ongoing,” adds Nadia Minkfield, agricultural and food economist at ABN Amro Bank.
The price of a packet of sugar in particular has been rising recently, but now you’re seeing sweets catching up and their prices rising somewhat faster than food, Minkfield says.
Sugar is only part of the grocery store
Minkveld and Geiger describe the importance of the sugar packet and sugar-containing products for Dutch consumers. “About 20 percent of your shopping cart contains products with added sugars,” Minkfield says.
This applies not only to sweets, cakes and chocolate, but also to soft drinks, ketchup and ice cream.
Sugar is often a fraction of the cost price
Of the 20 percent that are sugary, a large portion consists of foods in which sugar represents only a small portion of the total cost price, Minkfield says. The cost price also includes, for example, wage costs and the price of energy and transportation.
“As far as a packet of sugar is concerned, how often do you buy a packet of sugar?” Geiger says. Additionally, a packet of sugar at the store only costs approx €1so that increasing the price of a packet of sugar will have a limited impact on consumers.
Together, sugar packets and sugar-containing products account for 6 percent of the total food expenditure of an average household in our country, Geiger says.
Prices of other raw materials are falling
According to ABN economist Minkfield, it cannot simply be said that a rise in the price of sugar will lead to a further increase in the prices of products containing sugar. For example, a peach-flavored yogurt dessert contains some sugar, but… Dairy price It is much more important and is now declining.
Producers can also modify their recipes, according to Geiger. So use less sugar, or a different type of sugar that is cheaper. He says you also hear that producers are buying larger quantities than usual, which means they’re paying a slightly better price.
In this video you can see that biscuit producers are suffering from the high price of sugar:
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