MOTHBALLED Irish sugar growers and processors can only stand by and watch as world sugar prices reach their highest levels since the early 1980s.
Meanwhile, EU manufacturers see their profits threatened as they become increasingly reliant on imported sugar.
Irish sugar producers were put out of business by EU incentives to cut production in 2006. The reform now looks ill-advised, as Europe is likely to be affected worst by the high world sugar price.
Confectioners will bear the brunt, but low prices for other ingredients such as milk and peanuts are easing the impact.
However, consumers and manufacturers may face an escalating market situation if, as feared, sugar supplies become insufficient to meet demand.
"With the production balance forecast to be in deficit during 2009/10, the sugar market is now facing the risk of supply being insufficient to meet current consumption levels," according to the latest monthly report from Czarnikow, a London-based company which trades more than eight million tons of sugar per year. Global sugar prices have surged as much as 80% since the start of the year.
Analysts have blamed the record prices on the late arrival of monsoons in India, investor speculation, and lack of investment.
a d v e r t i s e m e n t
This appeared in the printed version of the Irish Examiner Thursday, August 20, 2009
