BDSI raises significant concerns over sharp raw ingredients price rises for confectionery
The BDSI German confectionery trade body has expressed further concerns regarding ‘significant increases’ in raw materials prices, energy costs as well as rises in logistics and packaging costs that are impacting the sector, reports Neill Barston.
As the organisation noted, these factors, in combination with the ongoing effects of the coronavirus pandemic have created extremely challenging business conditions for the industry and its related segments.
“There are extreme upheavals and dramatic price increases for many important raw materials at the same time, ”explains Dr. Carsten Bernoth,
General Manager of the BDSI.
“Manufacturers are particularly feeling the effects of significant price increases when purchasing the most important agricultural raw materials wheat, soy and sugar, however also in the area of packaging.”
As Confectionery Production recently reported, the organisation also noted that Brexit had been directly responsible for significant issues relating to trade with the UK, resulting in export sales being down by around 11% amid trading complexities.
Furthermore, the BDSI noted that wheat price climbed 50% on the commodity futures market, close to a market all-time high, as well as below-average harvest is expected. In addition, the costs of milk powder, sugar, hazelnuts and soy have risen sharply. These movements were caused, among other things, by lower crop yields, lower imports from third countries, plus an increase in demand in Asia.
The costs for the procurement of packaging materials and logistics and energy costs have also risen notably, with electricity prices for industrial customers having doubled within the past year – placing significant strain on confectionery and snacks companies.
Significantly, the organisation also noted major international logistics issues regarding freight capacities by road and rail as well as via container ships – which remain in short t supply for the transport of goods around the globe. Linked to this, during the corona pandemic and as a result of a temporarily fallow in world trade, many companies have reduced their capacities and stocks. Consequently, these reduced production capacities have been confronted by a situation of rapidly increasing demand as world economies recover.