Price hike in raw materials causes headache for German confectionery

In addition to the effects of the coronavirus pandemic, the wheat price on the commodity futures market climbed by 50% to a new all-time high within a year, and a below-average harvest is expected.

The costs for milk powder, sugar, hazelnuts and soy have also risen sharply, the Federal Association of the German Confectionery Industry (BDSI) reported. It said the problems stemmed from lower crop yields, lower imports from third countries, but also an increase in demand in Asia.

"There are extreme upheavals and dramatic price increases for many important raw materials at the same time​," said Dr Carsten Bernoth, BDSI General.

"Manufacturers are particularly noticeably affected by significant price increases when purchasing the most important agricultural raw materials - wheat, soy and sugar, but also in the area of ​​packaging​."

The costs for the procurement of packaging materials and logistics and energy have also risen significantly.

In international logistics, there are currently insufficient freight capacities on the road and rail as well as on container ships, the BDSI has reported.

Containers are in short supply for the transport of goods around the globe. During the coronavirus pandemic, many companies reduced their capacities and inventories and are unable to meet the surge in demand as the global economy recovers.

The BDSI said a ray of hope for companies in the German confectionery industry is that the demand for their products from Asia has increased again. German manufactures are also more optimistic about the business outlook with the USA.