Crown Confectionery is showing strong performance. This is interpreted as the expectation of price increases in snacks following news that global sugar prices have reached their highest level in 11 years.
As of 9:25 a.m. on the 9th, Crown Confectionery is trading at 9,670 KRW, up 12.8% compared to the previous day.
According to the Ministry of Agriculture, Food and Rural Affairs and the United Nations Food and Agriculture Organization (FAO) on the previous day, the global sugar price index in April this year was 149.4, a 27.9% increase compared to January. The price index is a figure that compares prices based on the average price from 2014 to 2016 set at 100. The global sugar price index rose monthly from 116.8 in January to 125.2 in February, 127.0 in March, and 149.4 last month. The rise in sugar prices is due to expected production decreases in producing countries such as India and China.
The Korea Rural Economic Institute forecasted that as sugar prices rise, domestic import prices will also remain high for the time being. If the sugar price increase prolongs, it could trigger ‘sugarflation’ (sugar + inflation), where prices of snacks, bread, ice cream, and beverages that use sugar as a raw material also rise accordingly.
Meanwhile, food companies such as Orion and Nongshim collectively raised prices of snacks last year due to raw material price pressures caused by inflation. In contrast, Crown Confectionery has kept prices frozen since 2019, and the ongoing rise in sugar prices is interpreted as fueling buying momentum on expectations that snack prices will also increase.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
