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Bill Radke: Last year’s sugar-cane crops were much weaker than expected, worldwide. That sent prices climbing. Last week the price for refined, white sugar
hit a 22-year high.
Marketplace’s Eve Troeh found out why.
Eve Troeh: If you’re like me, you put sugar in your coffee each morning. One packet or two without thinking much about the cost.
Jack Scoville: And that’s kind of the idea.
Jack Scoville is a vice president at Price Futures Group in Chicago. He say the price of sugar nearly doubled last year. But most Americans didn’t notice.
Scoville: We have a very controlled environment. You shouldn’t see it increase so much in the grocery store.
He says that’s because the U.S. subsidizes sugar. Our buyers pay more than the market price when sugar prices are low — so we can pay less when they’re high.
Other nations have to follow the market. In many places, alternatives like corn syrup and saccharine aren’t part of the food system. Scoville says sugar is an especially big deal in parts of the Middle East, India and Asia.
Scoville: They’re much bigger consumers of sugar and it’s a much more important part of their diet.
Which is why when sugar supplies run short, governments get nervous.
Scoville: It can create almost a panic situation. People will then start rushing to make sure that they have sufficient supplies, and prices move higher.
Scoville says this year’s sugar harvest looks a lot better than last year’s. That’s led countries to avoid buying at current prices. They’ll try to hold out until that new cane is processed into fine, white crystals — and the market comes down from its sugar high.
I’m Eve Troeh for Marketplace.