Trinidad Express

Aretha Welch awelch@trinidadexpress.com

Production down: Sugar cane farmers.

As the Christmas season approaches, sugar and sugar-based products are becoming more expensive.

Two weeks ago, the Central Bank released data which indicated that ’food price inflation, the main contributor to headline inflation measured 6.8 per cent… to September compared with 5.2 per cent in August.’

The Bank further stated, ’Increases in the food sub-index came mainly from fruits and sugar and confectionery products.’

This means that goods which, for a very long time, have carried relatively small price tags, would now see consumers digging deeper into their pockets to get these products even as manufacturers seek ways to manage the price increases.

Imran Khan, CEO of KC Confectionary, one of the country’s biggest producers of confectionary, said in an interview that though the price of sugar has been on the increase, the company has so far managed to keep prices steady.

Khan said this was possible because of a fixed price contract with the company’s current sugar supplier, the Sugar Manufacturing Company Ltd at Usine Ste Madeleine.

This contract expires in two months however, and Khan said new sugar prices to increase by at least 60 percent.

Meanwhile, at various groceries in downtown Port of Spain, shoppers said they have taken note of the increase in the price of sugar in the last few weeks.

’It has increased by about 50 cents on each pound,’ said a mother of two on Independence Square.

But the increase in the price of sugar is anything but sudden.

Khan explained that India, the world’s largest consumer of sugar, has experienced a significant fall in the amount being produced in that country because of drought.

Production level and the size of the canes grown by Indian farmers have been cut in half because of dry weather conditions and therefore India is now a major importer of sugar.

’The key thing is India is the second largest producer but largest consumer. But India hasn’t had a monsoon to really bring in the crops, ’ explained economist Jwala Rambaran.

Rambaran also pointed to slowing sugar production in Brazil, the world’s largest producer of sugar.

’Brazil is diverting some of its (sugar) production into ethanol, so there is a significant short fall from Brazil,’ he said.

Both Khan and Rambaran also agreed that speculation was also driving the price increase as producers and buyers anticipate a further fall in production by next year.

Prices are likely to shoot up again before they go down, said Rambaran, adding that the ’markets’ predict that by next March, sugar prices will reach a 30-year high and ’shoot through the roof.’

’This will set us back and affect us back in Trinidad,’ he said.