The increase of more than 50 percent in the price of sugar so far this year will have an impact on the sugary beverage, bakery and confectionery industry, sector experts warn. Some industries are even in dialogue with the Ministry of Economy.
According to data provided by the National Information and Market Integration System (SNIIM), at the close of business today, the price of standard wholesale sugar at the Mexico City supply center is located at 1,435 pesos per 50-kilogram package.
This price represents an increase of 53 percent compared to the 940 pesos reported in January of this year, and an increase of 60 percent compared to September 2022.
The rise in prices affects the entire country, since on average, throughout September 2023, the bulk of sugar is priced at 1,301 pesos nationwide, which represents an increase of 26 percent since the beginning of the year. In annual terms, the increase in product prices reaches 42 percent compared to September 2022.
In La Paz, Baja California Sur, The highest price to date was recorded, with a cost of 1,619 pesos per 50-kilogram package. It is followed by Colima, with a price of 1,554 pesos, and Culiacán, with 1,533 pesos.
Javier Bolio Hernández, external consultant in the soft drink industry, pointed out that the strong increase in sugar will not be immediately reflected in consumer prices because the soft drinks companies have already agreed on the price of the input for this year; However, he assured that increases in beverage prices would come in January and February 2024.
“The soft drinks companies are going to have to take (sugar) prices as quickly as possible for next year, that is, a more significant increase will be reflected in January and February of next year because they will prevent further increases,” he said. .
The National Association of Chocolate, Sweets and Similar Manufacturers (ASHOCO) assured that the situation is being evaluated at the sectoral and governmental level to find solutions that avoid affecting the industry.
“We are working hand in hand with the Sugar Chamber and the Ministry of Economy to look for solutions in this regard,” he indicated.
Lower sugar production hurts the price
Emmanuel Rodríguez, agricultural sector analyst, explained that several factors have contributed to the marked rebound in sugar prices. Firstly, the last harvest was strongly affected by drought, especially in regions such as San Luis Potosí, parts of Veracruz and Jalisco.
“This limitation in production due to adverse weather conditions has put pressure on supply and demand, driving the price increase“, he indicated
Rodríguez also highlighted that sugar, being a semi-perishable product with a long shelf life, usually gives rise to speculation in the market, so the shortage of inventories has further fueled speculation and led to an increase in prices.
“Furthermore, the wave of Unusual heat recorded in June caused extraordinary demand for sugar by the beverage industry, such as the production of juices and soft drinks. This, combined with the shortage of supply, has generated an increase in demand and therefore prices,” he added.
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