Sugar Prices On a Rise in Turkey Despite Enough Stocks

Published 2022년 4월 4일

Sugar prices in Turkey increased by 170% during the last 15 days of March 2022, given the anticipation of increasing production costs and prices in the coming months. Prices skyrocketed despite the fact that Turkey has had enough sugar stocks this year, with a surplus of 200 thousand mt. According to the MoA, the current Russia-Ukraine war has added some speculative movements and increased uncertainty among people in Turkey. Necessary warnings regarding the unexplained price increases have been given to sugar-producing companies to keep them in check. This comes as a relief as the country is preparing to celebrate the month of Ramadan, during which there is likely to be a spike in sugar demand and prices.

The demand for sugar has been increasing across the world, and the situation is similar in Turkey. According to the Ministry of Agriculture, Turkey produced 2.5 million mt of sugar in the production period of 2021-22. The USDA has projected a similar estimate of 2.8 million mt of sugar during this period. The country also has some leftover sugar reserves from the previous year, adding to the total volume of sugar available in the country. According to MoA, Turkey has 400 thousand tons of sugar reserves from 2020-21, which adds to the production volume, increasing the availability of sugar to 2.9 million mt.

As per the data of the Turkish MoA, the annual sugar consumption of Turkey stands at 2.7 million mt, and for the upcoming year, the country has a sugar surplus of about 200 thousand mt. The outlook for the supply and overall sugar market seems positive with the current surplus, but the situation may quickly change due to anticipated food price inflation. According to a local Turkish news daily, although sugar factories in Turkey have 1 million mt of sugar stock, the prices increased by 170% in the last two weeks of March 2022. The per kg price of sugar increased from USD 0.48 to USD 1.29 during this period, despite the fact that Turkey has enough stocks and production for this year.

The increase in price was driven by higher production prices given by factories as there was a prediction regarding rising production costs in the coming year. In addition, the Russia-Ukraine war has added some speculative movements and increased uncertainty among the people. MoA has started inspections in sugar factories for the second time, with an interval of 20 days after this increase. They have made the necessary warnings to sugar-producing companies, and as a result, some companies in the private sector have reduced their sugar sack prices. This comes as a relief as Ramadan approaches, a celebration that has demonstrated a spike in demand for sugar. Turkish officials are making efforts to balance sugar stocks while simultaneously the artificially high prices.