sugar Archives - Inflation Watch

Imperial Sugar squeezed by poor demand and high sugar prices

Dr. Duru — Mon, 15 Aug 2011 16:25:14 +0000

Last week, Imperial Sugar (IPSU) lost 59% of its value in one day after reporting extremely poor earnings. The stock has continued to sell-off over a week later losing an additional 20%. The reason? IPSU is experiencing the worst of all operating squeezes: higher input costs (sugar) and the inability to raise prices to accommodate those costs. In this case, competitive pressures are to blame.

From the earnings report:

“Our inability to increase prices in the face of higher raw sugar costs because of competitive pressures from domestic and Mexican sources was the principal driver of the quarter’s disappointing results,” commented John Sheptor, president and CEO of Imperial Sugar. “Raw sugar purchased during the quarter was priced largely against the March and May futures contracts, which peaked near $40 per hundredweight prior to the USDA import quota announcement in early April. The subsequent decline in the raw sugar futures market which occurred after the quota announcement was only temporary and the raw market has rallied back to near the same level. Our raw sugar costs in the fourth fiscal quarter should see little relief, while sales prices thus far in the fourth quarter have only improved modestly.”

Higher manufacturing costs also hurt operating results in the previous quarter.

Note that last week, the International Sugar Organization (ISO) confirmed that no relief is in sight from higher sugar prices.

IPSU crashes after reporting very disappointing earnings

Source: Stockcharts.com

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No relief coming from high sugar prices

Dr. Duru — Sun, 14 Aug 2011 18:00:51 +0000

Bloomberg reports that sugar prices are not coming down anytime soon. The International Sugar Organization says that current surpluses are not high enough to satisfy demands of importers for stockpiling. Production costs have also risen. See “Sugar to Stay High as Surplus Not Enough to Replenish Stockpiles, ISO Says.”

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Sugar prices continue to plunge

Dr. Duru — Thu, 11 Mar 2010 07:50:40 +0000

At the end of 2009, we noted that sugar prices were soaring to multi-decade highs. Sugar prices proceeded to peak at the end of January and have plunged 33% from there.

Sugar prices continue to plunge from multi-decade highs

Sugar prices are riding a rollercoaster of scarcity and abundance. Monsoons in India forced the world’s largest consumer of sugar to import it. This year, sugar crops are expected to produce a large bounty from India and Brazil. See “Indian sugar stocks turn bitter as output seen rising” for more details.

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Candy prices rising on increased cost of sugar

writejesse — Sat, 16 Jan 2010 12:51:40 +0000

With sugar prices at 29-year highs, candy makers are hiking their prices, the Chicago Tribune reports:

Many candy-makers instituted price increases of about 10 percent last year, said Sal Ferrara II, president of Forest Park-based Ferrara Pan Candy Co., maker of such venerable brands as Lemonhead and Red Hots….

Meanwhile, data from market researcher Nielsen Co. show that the price of non-chocolate candy jumped almost 9 percent during the 13 weeks ended Nov. 28 compared with the same time last year. Chocolate candy has experienced a similar price jump. Makers have been hit by high sugar costs and soaring cocoa prices.

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