Yahoo Finance ‘Sour taste’ as cost of sugar hits Easter eggs and hot cross buns, say UK retailers
A surge in the cost of sugar on global commodity markets is being blamed for a rise in the price of chocolate eggs and hot cross buns ahead of celebrations over the Easter weekend.
Figures from global food markets show that the main ingredients of traditional festive treats – butter, eggs, cocoa and sugar – have risen in price month after month since last summer, with sugar at a six-year high.
The British Retail Consortium, which represents many of the UK’s largest shop chains, said consumers would be left with a “sour taste” if they expected chocolate Easter bunnies to be available at discount prices.
It blamed the ballooning costs of raw materials and energy for a 12.4% increase year on year in March of “ambient” food found on supermarket shelves, including all forms of chocolate. Annual food inflation overall hit a record 15% in March, the BRC said.
Fresh food prices jumped in price by even more from last year – up 17% from 16.4% in the previous month – after the salad crisis inflated the cost of peppers, tomatoes and cucumbers for a second month.
While the spread of bird flu and rising energy costs are blamed for the jump in egg prices, poor harvests in Brazil and India last year – along with a decade of underinvestment – account for the shortage of sugar.
A drought in north Africa and Spain this winter has dramatically cut the amount of fresh fruit and vegetables on offer in supermarkets, pushing up their price.
However, the sugar price spike is likely to be temporary, following a bumper harvest on Brazilian sugar plantations in recent months and a recovery in sugar beet yields on European farms that could result in a glut this summer.
Helen Dickinson, chief executive of the BRC, said shop prices were likely to continue rising for a few months before they peak.
“As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March,” she said.
“Fruit and vegetable prices also rose as poor harvests in Europe and north Africa worsened availability, and imports became more expensive due to the weakening pound.”
Related: Spanish growers say weather, rising costs and Brexit caused UK salad shortages
Non-food inflation covering clothes, furniture and electrical appliances accelerated to 5.9% in March, up from 5.3% in February, the BRC said.
Though households wanting to buy TVs, hi-fis and games consoles would probably find “some sweeter deals were available”, Dickinson added.
Some economists have warned that some companies are using an increase in the global price of basic commodities as an excuse to increase prices – a practice known as greedflation.
Analysts argue that commodities such as sugar represent only a small proportion of the retail price, which depends more heavily on transport, warehousing and staff costs.
Headline consumer price inflation rose to 10.4% last month, surprising City executives who thought it would fall from the 10.1% level in January, largely in response to falling gas prices.
Those hopes were scuppered after the higher price of food and women’s clothing increased to maintain inflation in double digits.
