Severe weather conditions have inflicted significant setbacks on the global sugar industry this year, potentially leading to higher expenses when purchasing treats for Halloween.
The global sugar industry has faced a challenging year. Among the top ten sugar-producing nations, six have experienced severe weather conditions. Consequently, this has led to increased costs for products that rely on sugar, such as candy, as noted by Chief Meteorologist John Davis of Everstream Analytics.
He highlights the impact of drought in Thailand, the fourth-largest sugar producer, which resulted in a nearly 25% reduction in production. Meanwhile, India, the United States, and Europe, ranking second, sixth, and third in sugar production respectively, grappled with significant flooding. Everstream Analytics projects that extreme weather events are anticipated to reduce the global sugar supply by approximately 10% to 15% during the last year’s growing season..
Pakistan and Mexico have also been contending with dry spells, while China experienced destructive heavy rainfall.
“And, of course, all of the extreme weather that we’ve had on a global basis, it has come at the wrong time. If you get heavy rains during harvest, that interferes with the harvest activity and damages the crop overall. But it all comes back to the amount and frequency of extreme weather that we’ve had on a global basis.”
Over the last year, there has been a 42% surge in sugar prices, reaching a 12-year peak at 31.54 cents per pound, as reported by the International Sugar Organization.
The price increase is not limited to Halloween candy and baked goods. Sugar plays a versatile role, serving as a key ingredient in various applications, including ethanol fuel production, food preservation, medicine, wound care, cosmetics, pest control, bioplastic manufacturing, construction materials, paper production, herbicides, cement, adhesives, livestock feed, and detergents across a wide range of industries.
Sugar subsidies maintained an artificially low price for the commodity, prompting farmers to shift towards more profitable crops at the beginning of the new century. Subsequently, Europe implemented substantial reductions in sugar subsidies during the mid-2000s. Sugar producers in the Northern Hemisphere were afflicted by arid conditions.
