Press Releases

FOR IMMEDIATE RELEASE                                    CONTACT:   Phillip Hayes
Monday, August 3, 2009                                                          435-604-3113

PARK CITY, Utah—Sugar market disparities have created profits for food manufacturers, higher prices for grocery shoppers, and worries for many sugar farmers since this time last year. That’s according the annual Sugar Price Survey released by the American Sugar Alliance today at the 26th International Sweetener Symposium.

According to the report, the past year has seen shoppers paying more for a bag of refined sugar—from 52.5 cents per pound last July to a high of 57 cents in March 2009.  Price hikes can be attributed to the widening gap between the retail prices grocery stores charge and the wholesale prices that the grocery stores pay to purchase the sugar.

“In other words, the only thing that’s changed this year has been the profit margin for grocery stores,” the study noted.

Candy companies have also enjoyed considerable profits, as explained by data collected at an Arlington, VA-based grocery store.  A sampling of sugary products revealed that in almost every case, the product’s price rose from the same time last year—even though the wholesale sugar prices food manufacturers pay have dropped.  Wholesale prices were 38.4 cents per pound in August 2008 but have averaged 34.9 cents during the first half of 2009.

The biggest price anomaly of the past 12 months, according to the survey, has been the rapidly falling raw sugar price—the price sugarcane producers receive for their crops.  Those prices dropped from 23.2 cents per pound this time last year to a low of 19.8 cents in the first part of 2009.  Raw prices have rebounded slightly in recent months, the report observed, but remain fragile and could plummet if the U.S. Department of Agriculture allows additional imports onto the U.S. sugar market.

Unfortunately for grocery shoppers, farmers’ pain hasn’t been their gain.  The Sugar Price Survey explains that’s because food manufacturers pocket the savings from lower ingredient costs to boost profit.

Furthermore, “simple math displays that if food manufacturers did pass savings along to consumers, those savings would be too minute to even make a difference,” read the report. To help illustrate this point, the American Sugar Alliance calculated the farmer’s share of some common sugar-containing products.

“[A] 99-cent candy bar with a penny’s worth of sugar would still cost 98 cents even if candy companies got the sugar for free,” the study concluded.  “And that assumes that industrial sugar users would pass every penny of savings along to consumers.  This seems highly unlikely considering that almost every product [surveyed] costs more than it did the year before.”

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Link to Sugar Price Survey