Pull that sweet tooth because the price of sugar continues to rise


South Africans with a sweet tooth can expect to pay even more for the sugar in their coffee and even more for their favorite chocolate until at least the end of the year.

“This is not something that is unique to South Africa. This is a global trend,” says Wandile Sihlobo, chief economist at the Chamber of Agriculture (Agbiz).

Global sugar prices in general rose more than 20% year-on-year worldwide.

Sihlobo – and other experts – say the increases can mainly be attributed to a severe drought in Brazil, one of the main producers of sugarcane and refined sugar. This country was responsible for 35.6% of overall sugar exports last year.

However, the El Niño weather phenomenon caused a severe drought that limited this country’s supply.

Sihlobo says much of South Africa’s (a small, open economy) commodity prices tend to follow in the footsteps of the rest of the world.

The agricultural economist prof. Johan Willemse agrees. “Our sugar price is only linked to the global price.”

RNews previously reported that annual inflation for sugar, sweets and desserts accelerated from 11.9% to 16.4% in June. Prices for brown sugar (+17.4%), white sugar (+17.1%) and chocolate slabs (+16.2%) experienced the biggest increases.

Sihlobo and Willemse expect that the price of sugar will remain high until the end of the year before it starts to shoot up.

The news about chocolate is less rosy and the experts warn that prices for this delicacy may remain high even longer.

“The guys are not very positive about cocoa products, but the price of sugar is already recovering,” says Willemse.

The international price of chocolate has risen by 14% in the past year due to a limited supply of cocoa beans. El-Niño is also blamed for this.

This weather phenomenon also caused droughts in West African countries such as Ghana and the Ivory Coast, where cocoa beans are largely grown.

“Many of these disruptions can only be attributed to weather conditions in the different parts of the world where the products are manufactured. Because we are an importer of many of the products, this directly affects our prices.”

Hester Vermeulen, an agricultural economist at the bureau for food and agricultural policy (BFAP), says locally that load shedding also has a role to play in the upward sugar price. “All these products are processed and need electricity to be produced. It costs money to keep the lights on and the products cold.”

While the production costs for locally produced sugar products remain high, South Africans also pay more for the import of these products due to the weakening rand.