The cost of sugar has shot up more than 80% year-on-year as a result of flooding in Brazil and droughts in India the world's biggest producers and consumers of sugar.This week the world price of raw sugar hit an all-time-high of $0.48/kg.
This was unlikely to affect UK manufacturers, however, as they sourced most of their sugar from the EU, said experts.
As a result of significant subsidies on beet sugar produced within the EU and hefty tariffs on imported sugar, prices within Europe were still stable albeit considerably higher than world prices, a sector analyst said.
But some Fairtrade producers would be affected, he warned, as they were required to buy sugar from outside the eurozone and pay a price premium over world prices. Major confectioners such as Cadbury, which now uses only Fairtrade sugar in Dairy Milk, were sheltered by long-term buying deals, but smaller players would have no such protection.
"The good news for suppliers is that the pound has recovered somewhat and other costs, like distribution, are falling," said the analyst