US confectionery jobs threatened by high sugar prices
of manufacturers relocating due to high sugar prices, according to
the US Department of Commerce.
Over 10,000 jobs were lost at sugar consuming companies, between 1997 and 2002, because of high sugar costs in the US, said a report published on Tuesday.
The three main sugar consuming product sectors are non-chocolate confectionery, chocolate and chocolate confectionery, and breakfast cereal.
The International Trade Administration of the US Department of Commerce claims that for every one job saved in the sugar industry through protected prices, three are lost in confectionery.
Confectionery companies in the US are becoming increasingly more likely to relocate to neighboring Canada and Mexico in a bid to reduce costs.
This relocation, alongside internal restructuring and increased levels of imports, is what is costing confectionery jobs.
In 2004 the price of US sugar was 23.5 cents per pound, compared to the world price of 10.9 cents.
The high price is maintained through support loans, tariff-rate quotas and domestic supply restrictions.
For this reason domestic sugar price represent a larger share of total production costs than labour for the confectionery industry.
The share of total costs for which sugar accounts is 32.7 per cent in breakfast cereal manufacturing.
The cost share of sugar in non-chocolate confectionery is 28.1 per cent, 19.1 per cent in confectionery made from purchased chocolate, and 17.7 per cent of the costs when manufacturing confectionery from cacao beans.
The report said after that since 2000, about 6,400 domestic confectionery jobs had been lost due to closures, restructuring and relocations. High sugar prices were cited as a major factor.
The report also notes that the figure does not include the number of jobs that were created abroad by US confectioners that, without the impact of high sugar prices, could have been based in the US.
Displaced domestic production is also reflected in an increase of sugar-containing products being imported into the US.
Imports of sugar-containing products had grown to $18.7bn (€15.8bn) in 2004, from $6.7bn (€5.6bn) in 1990.
About 987,810 people work in sugar using industries in the US.
