Global concerns surge over sugar production due to climate-related impacts on major exporting countries.

In the wake of the ongoing climate crisis, the sweet tooth of dessert enthusiasts worldwide is facing a bitter reality as the price of sugar is skyrocketing. The global cost of sugar has soared to its highest since 2011, primarily driven by underproduction concerns in India and Thailand, the two largest exporters of sugar after Brazil.

India, grappling with an extreme dry spell, and Thailand, facing a severe drought, are experiencing adverse weather conditions that threaten sugar crops. The rising global temperatures, with 2023 expected to be confirmed as the hottest year on record, are contributing to droughts and extreme weather events, impacting food yields, including sugar. The repercussions of this crisis are now being felt in the prices of chocolate, sweets, and other desserts globally.

According to the US Department of Agriculture, US consumers witnessed an 8.9% increase in sugar and sweets prices in 2023, with an additional 5.6% hike anticipated in the current year. Major corporations, including Mondelēz, the conglomerate behind Cadbury, Oreos, and Toblerone, have warned of inevitable price increases for their products.

Dirk Van de Put, the CEO of Mondelēz, highlighted the necessity for a “straightforward price increase” for consumers, attributing it to the soaring costs of sugar and cocoa. Climate economist Gernot Wagner from Columbia University’s business school emphasized the undeniable impact of climate change on food prices, coining the term “climate-flation.”

Complicating matters, sugar-producing countries are considering export limits to secure their own stocks, and port bottlenecks in Brazil further constrain exports. While the US, with its regulated sugar prices and imports, may experience relatively milder consequences, developing countries and subsistence farmers are poised to be the hardest hit.

Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, expressed concerns about the long-term impact of climate change on food affordability. He noted that the issue would be more severe in countries heavily dependent on food expenditures, where the dramatic rise in sugar prices could have a profound impact on households, particularly those with lower incomes.

The ongoing sugar price shock serves as a stark reminder that existing assumptions about food production must be reevaluated. Wagner warned that as the world moves away from the stable climate of the last 10,000 years, pressures on the availability and price of food will intensify. The consequences may extend beyond expensive desserts for consumers, reaching vulnerable populations and subsistence farmers facing the potential loss of their livelihoods due to extreme weather events driven by climate change.