Commodity price pressures have cost impact on sweet treats in ANZ

Wednesday, 11 July, 2007

A combination of local and global pricing pressures on a range of ingredients means that confectionary is likely to cost more in the near future.

"During the past twelve months there have been significant increases across a range of raw materials that make up the core ingredients in confectionary," said David Greenwood, CEO of the Confectionary Manufacturers of Australasia Ltd.

"As with many food products which have had their prices raised in recent months, it is no longer possible to prevent the costs of confectionary inputs from being passed on to retailers and consumers by manufactures in Australia and New Zealand.

"The west coast of Africa and the Ivory Coast are where much of the finest quality cocoa is grown. The continuing re-occurrence of civil war in the Ivory Coast has also contributed to price spikes in this commodity and we also have a situation where global demand is fast exceeding stocks.

"Milk production has been affected by severe drought conditions in 2006/07 and production is expected to be down 9.4 billion litres with no reduction in overall demand. Stock feed bills are estimated to have increased by as much as 43 per cent.

"Due to increased demand over the past year, nuts such as almonds have experienced significant increases in global pricing."

"Price increases will vary from product to product, depending on ingredients and quality. Retailers and consumers should be aware that despite these cost increases, Australia and New Zealand will continue to enjoy some of the best value and quality confectionary in the world when compared to many other countries."

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