The price of sugar increases: what is the reason for its rise?

The increase in sugar is worrying Peruvians, as it is an input used in the daily lives of many families, but what is happening so that increase its price to 38% so far this year?

According to Eduardo Zegarra, former chief of staff of advisors at Midagri, fertilizers account for almost 20% of the cost of sugarcane production, he explained to RPP Noticias.

“And if we consider that the price of fertilizers has risen by almost 300% due to the impact of the Russian invasion of Ukraine, then it is possible that they are transferring this increase to the consumer,” he said.

To this, it should be noted that the lower production of cane nationwide, there has also been a fall in the import of the input, mainly from Colombia.

According to the Agrodata.pe portal, last year 0.23% less was imported than in 2020. This was due to lower production on the international market as a result of climate problems in China and the change in sugar crops in several countries.

THE BASIC FAMILY BASKET ALSO ROSE

Not only is the rise in sugar worrying, it was also known that the main necessities have increased their price. Bread, rice, legumes, chicken, fuel, among others, have seen an increase, which undoubtedly affects the poorest sector of the country.

Faced with this, the economist and former Minister of Agriculture and Housing portfolios, Milton Von Hesse, argued for the Chamber of Commerce magazine, that there are two factors that are influencing the rise. The first is domestic and has to do with the seasonality of some products such as potatoes, which are not harvested in months such as February and March, and the rains that are generated and which make it more difficult to bring food products to the destination markets.

The second factor, and one that needs to be taken more into account, is related to the external situation, is the conflict between Russia and Ukraine. “There are important markets that are being affected. The first of these is oil that has risen in recent weeks and that greatly complicates the price of truck freight and the cost of energy because there is still a lot that is produced from fossil fuels,” he admitted.

“Along with oil, we have also seen that fertilizer prices have risen, urea is an important fertilizer that is widely used in Peru,” he says.

In this context, Von Hesse assured that the war also affects some products that Ukraine produces such as wheat and other cereals, which are seeing a high increase in their prices, all as a result of the armed conflict. “If wheat rises, bread goes up, as well as dairy products and this pushes the cost structure of domestic production,” he said.

“The other problem is food production. Russia and Ukraine are known as the granary of Europe because it provides everything that is grain and food to this community and since there are problems in both countries, the price of these commodities increases,” he added.

WHAT ACTIONS SHOULD OUR AUTHORITIES TAKE IN THE FACE OF RISING PRICES?

According to the renowned specialist, unfortunately, there is nothing to be done on the subject of external factors, less than one day to the next.

“Banning, for example, the import of powdered milk at the request of dairy farmers is not the solution because all it generates is to make milk more expensive for urban consumers,” he said.

“Not only is there less income, but also more informality. Then there is a theme of promoting decent, formal, adequate and better quality employment, and that starts from generating more private investment and that, in turn, because of having more confidence,” said specialist Jorge Carrillo Acosta.

(With information from PTR and CCL)

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