US food giants concerned about sugar shortage potential

Posted by Isobel Drake on 14th August 2009

As world sugar prices surge to their highest levels since the 80s, some of the largest US food manufacturers are concerned that import curbs in America could see the country “virtually run out of sugar”, the Wall Street Journal reported.

A host of household names – including Kraft, Mars and General Mills – reportedly wrote a letter to American Agriculture Secretary Thomas Vilsack advising of the prospect of a severe shortage of sugar used in confectionery, cereal and thousands of other products.

Import quotas in the country limit the amount of sugar that can be imported each year and such quotas could threaten jobs and lead to further price hikes, the companies wrote, according to the Journal.

Sugar prices have soared this year and some analysts have suggested the threat is not as real as the letter makes out, with the manufacturers simply keen to dismantle trade barriers to put a dampener on further price rises.