Climate crisis makes food more expensive worldwide, experts warn – Executive Digest

The climate crisis threatens, among other things, coffee and beer, but now it can extend another pleasure at the table: desserts. That's because global sugar prices hit their highest level since 2011 following droughts in India and Thailand, the world's biggest exporter after Brazil.

Rising global temperatures – with 2023 widely expected to be the hottest year on record – are fueling droughts and other extreme weather conditions affecting food production, including sugar. The price hike in chocolates, sweets and other sweets has already started reflecting.

U.S. consumers saw the price of sugar and sweeteners rise 8.9% in 2023, and a 5.6% increase is expected this year, according to the U.S. Department of Agriculture, which is higher than the historical average. Last November, Mondelez, which owns brands like Cadbury, Oreos and Toblerone, warned of price hikes for its products. In an interview with Bloomberg, Mondelez's chief executive Dirk van de Putt assured that there will be a “direct price increase” for consumers due to higher prices of sugar and cocoa.

Gernot Wagner, a climate economist at Columbia University's business school in the US, warned that big companies have a variety of motivations for raising prices, but the fundamental threat posed by climate change cannot be denied.

“Extreme weather affects foods — a year ago it was avocado, now it's sugar,” Wagner said. “Climate inflation is worsening. It's convenient for an Oreos owner to point to climate change for the price hike, but it's understandable.

According to Joseph Klaber, a senior researcher at the International Food Policy Research Institute, the impacts of price increases will be felt most acutely by developing countries and subsistence farmers. “There is no doubt that sugar prices will remain very, very high until we see the collapse of El Niño,” the expert assured. “The problem will be accessible. In the U.S. and other high-income countries, there will be an increase in the cost of food felt by families, especially poor families, but the story is different in countries where 40% of food spend is affected dramatically.”

Overall, the European Central Bank has warned that global food inflation could reach 3% per year by 2030 due to the climate crisis unless major adaptation work is undertaken.