Sugar lovers, beware: Filling that sweet tooth craving may now hit you in the wallet as well as the waist after sugar reached its highest price level in three decades.
According to the Financial Times, the dramatic jump in price was triggered by a spell of dry weather in the south of Brazil leaving output of cane to fall by a third in early October. To make matters worse, China, Australia and Russia’s crops also suffered from bad weather. At the same time, sugar merchants have also noticed inventories are at their lowest levels in decades with buyers opting for hand to mouth purchases. (See pictures of delicious desserts)
The other factor impacting the price of sugar is India’s decision to withhold its own sugar from the international market. Globally, the International Sugar Organization believes that production will outpace demand by 2 million tonnes over the next year. But if India brings an end to restrictions on exports that are keeping the domestic price low, there could be a return to the volatility of sugar prices as seen earlier in the year. While sugar is widely available in the west, it is an essential source of cheap calories in emerging economies, like India and Brazil.
So next time you pour a cup of coffee, you may make it one lump, not two. (Read Why Global Warming Portends a Food Crisis)