industry NEWS
Raw sugar and cocoa prices reach 10-year high
Prices of raw sugar and cocoa touched 10-year and seven- year highs respectively in April 2023, The Smart Cube reports, due to tight supply and rising demand for both commodities. Looking ahead at sugar pricing, the commodities output
is projected to drop in key producing countries such as India, Thailand and China. Output in India, which is the second- largest sugar producer, is likely to fall 5% Year-Over-Year (YOY) in the marketing year 2022/23. In China, the top sugar consumer, its output is estimated to drop 6.3% YOY. Meanwhile,
according to the International Cocoa
Organisation, the cocoa market is also expected to witness supply defi cit as global cocoa ending stocks are forecasted to fall 3.5 per cent YOY in the marketing year 2022/23. For example, Ivory Coast, the leading cocoa producer, is projected to witness a 25 per cent YOY fall in its mid-year cocoa crop. Nidhi Jain, Associate Specialist at The Smart Cube,
comments on what has caused the prices of these commodities to surge, as well as the impact this is set to have on the confectionary industry: “Sugar output has largely been impacted by variable weather conditions. In India, the likely fall in sugar production for the marketing year 2022/23 can be attributed to lower yields, as the key producing states were aff ected by unseasonal rain. In turn, this saw lower cane availability, causing early closure of sugar mills in the country. “Meanwhile, sugar output in China is estimated to drop
due to dry weather in the key sugarcane-producing province of Guangxi. Although Brazil is expected to witness a bumper crop this year – up 15 per cent YOY – ongoing logistical bottlenecks and supply chain issues are restricting sugar shipments from the country. Furthermore, rains have delayed sugarcane crushing in the country. “Looking at cocoa prices, these are projected to witness a fall owing to hot and dry weather in cocoa-producing countries, such as Ivory Coast. Cocoa bean arrival from
KennedysConfection.com Kennedy’s Confection May 2023 7
farms to Ivory Coast ports fell 4.6% YOY from 1st October to 16th April. Additionally, crop quality in West Africa may be jeopardised due to a lack of fertiliser and pesticides availability as continued sanctions on Russia – the largest fertilisers exporter – has limited exports.”
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