Your indulgence in milk and cookies is about to get a little heavier on your wallet, as the cost of sugar and sweets is set to rise by 5.6% in 2024. This unfortunate development follows an extreme drought in Thailand and India, leading to yet another year of poor sugar crop yields.
According to the Department of Agriculture, US consumers have already experienced an 8.9% increase in sweets prices, well above historical averages. The global cost of sugar has reached its highest point since 2011, as India faced a dry spell and Thailand grappled with a severe drought.
Six out of the top 10 sugar-producing countries experienced extreme weather conditions in 2023, with Thailand witnessing a staggering 25% reduction in its normal sugar production.
India and Thailand, the world's largest exporters of sugar, have been significantly impacted, and this trend is expected to continue as global temperatures rise, leading to more severe droughts and extreme weather events that adversely affect crop production.
Major chocolate brand Mondelēz, responsible for favorites such as Cadbury, Oreos, and Toblerone, issued a warning in November about a potential price hike. CEO Dirk Van de Put explained to Bloomberg that the rising costs of sugar and cocoa necessitated a "straightforward price increase," dismissing the idea of mitigating the impact by reducing product sizes.
"While the rest of our input cost is largely flat for next year, those two are really causing us to have to increase prices again," Van de Put said. The effects of these price hikes were already noticeable during Halloween, with candy prices surging by 13%.
In 2023, chocolate prices rose approximately 12%, double the average increase for other groceries. Rising demand in Asia and a spike in butter prices, used in cocoa butter production, contributed to this surge.
The sugar price hike is being attributed to the El Niño weather pattern, with some experts humorously suggesting that El Niño has a "sweet tooth."
Agriculture researcher Carlos Mera stated, "You can say El Niño has a sweet tooth because it sort of eats or takes away much of the sugar in the world," predicting that these increased costs would be passed on to consumers in 2024.
