Extreme weather has dealt a major blow to the global sugar industry this year, which could cost you more money to fill the treat bags.
“This has been a very difficult year for global sugar. If you look at the top ten producing countries this year, six of them experienced extreme weather,” John Davis, chief meteorologist at Everstream Analytics, told FOX Weather. “And that results in higher prices for everything you use sugar for, including candy.”
He highlights the drought in Thailand, the world’s fourth largest producer, which has reduced production by almost a quarter.
India, the United States and Europe suffered floods, representing the second, sixth and third producing countries.
Everstream said extreme weather is expected to reduce global sugar supplies by 10-15% in the 2023/24 growing season.
The U.S. Food and Drug Administration estimates global production for this season at 187.9 million tons.
Pakistan and Mexico are also facing drought. China experienced devastating rainfall.
“And, of course, all the extreme weather we’ve experienced globally has come at a bad time,” Davis said. “If you receive heavy rain during harvest, it interferes with harvest activity and damages the crop as a whole. But this all depends on the amount and frequency of extreme weather events we have experienced globally. »
Last year, sugar prices increased by 42%. Sugar prices are at their highest level in 12 years, at 31.54 cents per pound, according to the International Sugar Organization.
“Sugar prices are being discussed, but we are not in a shortage situation when it comes to sugar supply and we do not anticipate any disruption,” said Todd Scott, senior director of communications at The Hershey Company, at FOX Weather in July. “Similarly, the price of sugar has no impact on our Halloween.”
And it’s not just Halloween candy and baked goods that are seeing price increases. Sugar can be used to make ethanol.
It is a staple food and preservative used in almost all food and beverage categories. It is used in medicine, wound care, cosmetics, pest control, bioplastics, building materials, paper products, herbicides, cement and adhesives, livestock feed and detergents.
“In other sectors that use sugar, we talk a lot about energy, ethanol, things like that,” Davis said. “Many different sectors have sugar as a key element. »
El Niño behind the last surge in sugar prices in 2011
Sugar subsidies kept the price artificially low, so farmers replanted more profitable crops after the new turn of this century. Then Europe reduced its sugar subsidies in the mid-2000s.
“The year 2008/2009 saw the biggest drop ever recorded in global sugar production,” financial company Vikingen.se said. “Global production fell by almost 20 million tonnes. »
In mid-2009, an El Niño episode occurred and the world’s leading sugarcane producer was hit hard.
“Sugarcane crushing operations in Brazil in July, August and September were affected by wet weather, resulting in a global loss of 1.5 million tonnes of sugar production,” Vikingen said. “This sugar was urgently needed in India and elsewhere. As a direct result, the price of raw sugar rose to 30 cents per pound in February 2010.”
Sugar producers in the Northern Hemisphere have been struggling with dry weather.
New York Post