Sugar is The New Gold

          If you’re in the middle of enjoying a heart-shaped box of chocolate truffles from your sweetheart, consider this: they may be harder to come by next year at this time—or, at least they could be much more expensive.
          No, it’s not because of a new directive from the Obama Administration’s Waist Management Czar. Just kidding. There’s not a Waist Management Czar—not yet, anyway.
          It’s because a shortage of sugar could be looming in our near future. Last summer, some pretty big names in the sugar business—Kraft Foods, General Mills, Hershey, and Mars, Inc—got together and sent a letter to Agriculture Secretary Thomas Vilsack. In it, they warned that the U.S. could “virtually run out of sugar” if the Obama administration doesn’t ease the import restrictions amid soaring prices on the sweet commodity.
          The main factors that contributed to last year’s price increases were wet weather in Brazil and a growing demand for their sugar to be turned into the highly inefficient (and more expensive to produce) ethanol. Brazil is the world’s largest sugar producer.
          Currently, the U.S. only allows unlimited imports from Mexico without tariffs in an effort to boost prices for U.S. sugar farmers. Tariff-free supplies from other sugar-exporting countries are limited by a quota.
          The companies said they might have to increase prices for consumers and lay off workers if the Agriculture Department doesn’t ease up on those restrictions.
          Flash forward to this past week. An article in Bloomberg reported that the global sugar shortage, which drove prices to their highest levels in 30 years, may peak in the third quarter of this year because of demand from the US, Mexico, India and Pakistan.
          So, this summer, you can expect to see sugar and anything containing sugar in any form—that’s a lot of items—to increase in price. They’ll most likely stay that way through the Christmas holiday baking season too. Jonathan Drake, head of sugar business at Cargill, Inc., said, “Going by history, prices will stay high for at least six months. High prices will also be accompanied by greater volatility.”
          You can take this information or leave it. But, if you like to do a lot of holiday baking and still plan to continue your tradition this coming Christmas, it’s better to be prepared than not. Get your sugar while the gettin’s good.


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