Big Interview


Under Pressure: Unpacking sugar and cocoa challenges


Kennedy’s Confection’s Editor, Kiran Grewal, sits down with Nidhi Jain, commodity specialist at The Smart Cube to explore the ‘sugarfl ation’ phenomenon and cocoa price surge.


Q: Can you explain the current situation with sugar prices and how the ongoing dry weather in sugar-producing regions like India and Thailand is impacting the market? From June 2022 to June 2023, sugar prices rose by 41.9 per cent, off the back of declining production in key producing nations such as


India, Thailand, and China, leading to a steep rise in sugar prices over the past few months. To describe this sharp infl ation in sugar prices, a new term emerged: ‘sugarfl ation’. The price hike is largely being driven by the El Niño


10 Kennedy’s Confection August/September 2023


weather phenomenon. The weather event – which began in June 2023 and brings warmer weather patterns and frequent periods of dry conditions to parts of Asia, West Africa and Australia, as well as heavy rainfall to Brazil and parts of the US – is infl uencing the production of numerous food and agricultural products, including sugar. The intensity of the El-Niño-driven dry season in Asia


led to three of the top fi ve global sugar producers – India, Thailand, and China – witnessing a decline in production, which is expected to persist throughout H2 2023. Looking specifi cally at Thailand, sugarcane output is expected to decline 21 per cent in 2023–2024 as a result of the weather phenomenon. The wider confectionary industry is under pressure to tackle the crisis. Small players in the confectionery market,


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