NCA and Caobisco issue joint plea to US and European governments in tackling sugar shortages
The National Confectioners Association (NCA) has joined forces with European confectionery organisation Caobisco, in a plea to governments in the US and Europe to take urgent action addressing “deeply concerning” sugar shortages, writes Neill Barston.
In a combined statement, the two groups stressed the severity of the situation in both regions – which comes against a backdrop of major supply chain issues including ingredient price inflation, worsened by war in Ukraine.
According to the NCA and Caobisco, tight levels of supplies have pushed prices to historic and unsustainable levels, which has prompted concern from global companies and analysts operating within the sector.
As previously reported by Confectionery Production, the industry is already facing challenges within the cocoa sector, with demand anticipated to outpace resources for premium cocoa supplies in particular, as consumers become ever-more conscious about their purchases.
“We are urging the US and The EU Commission and Member States to relax tariff-rate quotas (TRQs) to allow for additional and faster importation of quality white sugar. Where possible, we encourage collaboration and cooperation to facilitate access to additional imported sugar supplies. There are several tools available to both the American and European authorities.
“Inaction could result in factory slowdowns and stoppages in a time of global economic uncertainty. This uncertainty places a burden on the market and the consumer, especially when we look to deliver products in a timely manner. Currently, demand far exceeds supply, and this has a ripple effect throughout the whole supply chain.”
Supply chain complexities
As the NCA and Caobisco noted, the obstacles in both the United States and Europe are also political in nature due what is widely considered as being unnecessary protection of the market through import restrictions, with sugar having ‘extremely high’ import tariffs.
Furthermore, as the organisations added, in North America, candy makers also have to contend with wider economic uncertainties within the region’s economy, which have also played a factor in increasing costs. The two groups also stated that US federal policy limiting supply had also negatively impacted on the situation, resulting in costs being passed on to consumers.
Significantly, according to the Consumer Price Index (CPI) data released by the Department of Labour, the cost of “food at home” (consumer food products like cereals and bakery items, nonalcoholic beverages, and others) is up 13% in the last year, which is thought to be the largest annual increase since 1979.
Meanwhile, conditions in Europe are also continuing to experience key challenges, with sugar prices reaching historic highs, with general supply chain issues further affected by a decrease in beet planting areas and yields, as well as adverse weather conditions impacting on available supplies.
Furthermore, the war in Ukraine has also hampered access to energy and other inputs, affecting food security across the continent, underlined by Confectionery Production’s report last month in which German confectionery body, the BDSI, called for urgent assistance grappling with 400% energy price rises, which it said would have a critical impact on industry. Indeed, it is against the backdrop of such challenges, that the sector collectively requested the re-scheduling of the annual international ISM confectionery event, normally held at the end of each January, which will now take place in April 2023.
As the NCA and Caobisco also observed, many companies have experienced difficulty in obtaining sugar volumes equivalent to or superior to the previous campaign. This is seen as a serious barrier to renewed growth, with the organisations noting that the challenges faced go far beyond pandemic-related issues, with freight problems, port and shipping issues, as well as labour challenges all playing their part in placing further pressure on the industry.