Potential Candy Shortage Haunts This Halloween

Potential Candy Shortage Haunts This Halloween

Autumn has begun, lawns are being decorated, and both the young and young-at-heart are deciding on this year’s Halloween costume.

Unfortunately for trick-or-treaters, the bags may not get as full this year as they have in the past, thanks to supply chain issues and inflation.

A potential candy shortage is looming this Halloween.

Aaron Lawry is an assistant professor of consumer science at Purdue University. He explains that the pandemic has hampered candy producers, such as Hershey’s, due to a sharp increase in demand. This can also coincide with continued supply chain issues and rising inflation.

Supply chains for candy are a lot more complicated than you’d realize. So, it is true that the candy is ultimately made in a factory somewhere in the middle of America,” Lawry said. “But, the ingredients come from all over the world; the milk fat, the palm oil, the cacao. Everywhere from Latin America to New Zealand is kind of contributing to the ingredients from within that candy.”

A potential factor in shortages of treats that may carry over into the Halloween season is a sugar shortage. According to the International Sugar Organization (ISO), there’s currently a global sugar deficit of 200,000 metric tons.

As a result of this, white sugar hit a contract high of US$598.6 per tonne in July 2022, its highest since October 2016.

Raw sugar peaked at US$20.42 cents in November last year which was its highest in about four and a half years.

Chief executive officer of the Seprod Group Richard Pandohie said, “There is significant supply constraint re sugar.”

He further advised “for the short term we are okay, but we are trying our best to mitigate the medium-term risk.”

Part of this sugar supply chain problem can be attributed to Brazil, which is recognized as the largest producer of cane sugar. The nation cancelled some of its sugar export contracts earlier this year and focused on ethanol production instead to benefit from rising energy prices.

Commodities trader Louis Dreyfus projected on Wednesday that Brazilian mills will divert a larger-than-expected amount of sugarcane to ethanol production due to high energy prices, causing a reduction in global sugar supplies.

Dreyfus sugar director Enrico Biancheri said during the Citi ISO Datagro sugar conference in New York that Brazil’s center-south (CS) mills would produce only 29 million tonnes of sugar in the new season that started in April, a view that would be in the low end of analysts’ estimates so far.

“At current prices the world is heading to a shortage of sugar, due to a ethanol-oriented crop in Brazil,” Biancheri said, adding that sugar prices will need to rise to a premium over ethanol prices to cause an increase in sugar production.

In terms of inflation, prices are already spiking . . . or product size is shrinking.

The overall price of candy saw a 2% spike from July to August this year, with some candy brands hiking their prices higher than others, reports The Takeout. Hershey’s chocolates are 14% costlier than usual, Mars increased the prices of its candies by 7%, and Nestle’s prices rose by 9.8% over the last few months. Due to these rising prices, chocolate sales have seen a 1.5% dip since 2021.

Not all candy makers are responding to inflation by hiking prices, however. Representatives from Hershey’s and Mondelez told Reuters that in order to satisfy shoppers’ desire for lower prices, the chocolate makers have resorted to shrinkflation, or reducing product volumes while keeping costs level. So while shoppers may find their Cadbury chocolate bars to cost the same as they did in previous years, they may also notice a lighter-weight treat.

Between green energy idiocy and inflationary fiscal policy, this Halloween may be dark, full of terror, and devoid of treats.

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