Sugar

Climate Crisis Is Making Sugar and Sweets More Expensive, Experts Say

Sugarcane harvesting in Thailand on Feb. 11, 2016. IBM Research / CC BY-ND 2.0

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One of the biggest commodities in the world, sugar, is being impacted by the climate crisis.

According to the U.S. Department of Agriculture (USDA), climate change has driven the cost of sugar globally to its highest levels since 2011.

The planet is heating up, leading to extreme weather that affects foods like sugar, beer and coffee, reported The Guardian. An extreme drought in Thailand — the second largest sugar producer in the world after Brazil — has threatened sugarcane crops, as has severe dry weather in India, another of the top three sugar exporters.

Concerns about lower production have driven up prices of sugar and its byproducts, like chocolate and other sweet treats.

“You can say El Niño has a sweet tooth because it sort of eats or takes away much of the sugar in the world,” Carlos Mera, head of agri commodities markets at Rabobank, a Dutch banking and financial services company, told CNBC. “Sugar prices have probably already been passed on [to consumers] but certainly for chocolate we should expect a big increase at retail level — and El Niño is certainly something to watch.”

Sugar and sweets prices went up for consumers in the United States by 8.9 percent last year, the USDA said, with an increase of 5.6 percent predicted for 2024, The Guardian reported.

The chief executive of Oreo maker Mondelēz, Dirk Van de Put, told Bloomberg last year that a “straightforward price increase” would be needed because of the elevated prices of sugar and cocoa. The company also makes products by Toblerone and Cadbury, among other brands.

Gernot Wagner, a Columbia University climate economist, said that even though big corporations have different reasons for price hikes, climate change’s influence couldn’t be dismissed.

“Climate-flation is a thing and it’s getting worse. It’s convenient for the owner of Oreos to point to climate change for a price increase but it’s also understandable,” Wagner said, as reported by The Guardian.

Sugar price increases will affect subsistence farmers and developing countries the most, said Joseph Glauber, an International Food Policy Research Institute research fellow. Glauber said that until El Niño subsides, sugar prices would continue to be high.

In the U.S., sugar price hikes and imports will not be as substantially affected as in other countries, as imports and pricing are impacted by numerous regulations.

“The issue will be affordability. In the U.S. and other high-income countries, there will be an increased cost of food that will be felt by households, particularly poorer households, but it’s a different story for countries where 40% of expenditures are on food, which will be dramatically affected,” Glauber said, as The Guardian reported.

Wagner explained that agriculture has been “optimized for” the relative stability of the weather of the past 10,000 years.

“We are leaving this Goldilocks temperature band and that is going to put pressure on the availability and price of food,” Wagner said, according to The Guardian. “Some of the major food crops won’t decline linearly as temperatures increase – they will fall off a cliff due to extreme weather days. I’m less worried about a big food conglomerate making Oreos more expensive than I am consumers living on the margins and the poor subsistence farmers who will have their lives and livelihoods wiped out.”

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