What Is Causing the Rise in Sugar Prices? Study Conducted by the State Commission for the Protection of Economic Competition

The State Commission for the Protection of Economic Competition of the Republic of Armenia has recorded that between December 1, 2020, and January 11, 2021, there was a rise in the retail price of sugar in certain retail outlets belonging to major trade networks. The Commission informed Sputnik Armenia that a study has been conducted to identify the reasons behind the increase in sugar prices.

Yesterday, Sputnik Armenia addressed this issue, noting that despite a significant increase in the number of sugar importers (up by 10), the price has not only remained high but has also increased.

The Commission's study revealed that the average import prices of sugar have risen by about 22%, while the average price of imported sugar cane has increased by approximately 2% per kilogram. Additionally, the depreciation of the Armenian dram against the US dollar and Russian ruble has been around 4%.

Moreover, significant impacts on the sales prices of sugar are influenced by the volume of remaining sugar stocks in the warehouses of economic entities and the storage methods employed (weighted average, FIFO, LIFO).

The Commission also reports that these factors have affected the conditions and prices of sugar circulation. As a result, compared to December 1, 2020 (328 dram), the average retail price of sugar increased by approximately 5% to 344 dram by January 11, 2021.

It is worth noting that the Commission had previously analyzed the sugar market from January 2018 to October 2019, revealing interesting trends. Specifically, during 2018 and 2019, the largest sales volumes were recorded by “Alex Holding” and “Alex and Holding” LLCs, as well as “Armen-Hamik Brothers” LLC. Their sales volumes constituted 98% of the total sales volume in 2018 and 96% in 2019.