Mystery: Why is sugar barely available in Hungary?
No fuel, no sugar, what comes next? Sugar shortage starts to become prevalent all over Hungary. However, it is a mystery why this product is missing from so many shops. According to data, there is more than enough sugar in the country to meet the needs of the customers. Yet, only a few lucky customers are able to get their hands on price-capped sugar.
Sugar may be the next item that will be in short supply after the recent fuel shortages in Hungary. Price-capped sugar is about two and a half times less per kilogram than normal sugar. But sugar is not fuel, even though the same factors apply on it in terms of economics. Price caps alone cannot explain why there is no sugar on the shelves.
Where did sugar go?
In recent weeks, it has been almost impossible to get price-capped sugar which costs HUF 250 (EUR 0.6) per kilogram. It takes about one hour on average for all the sugar to vanish from the shelves. Most people are preparing for a lasting sugar shortage as was the case with fuel in recent weeks. In the case of fuel, the falling supply and the drastically growing demand created the shortage, but the reason for the sugar shortage is still a mystery.
Árpád Dorogi, vice-president of the sugar product Council and interprofessional organisation, said to Napi.hu in an interview, that there was enough sugar to meet the needs of the market. According to the expert, only retailers can give a proper answer as to why sugar became unavailable. Factories are still processing this year’s sugar beet harvest. He highlighted that a factory at Kaposvár would be able to produce 120,000 tons of sugar, yet it only produces 60,000 tons at the moment. Although, the land area used to grow sugar beet had shrunk to about one-tenth over a few decades.
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Hungary cannot produce enough sugar beets, but it is easily importable. However, that might require the abolition of the price caps. If that happens, demand is expected to fall by about 10-15 percent. In the past few years, there was a surplus of sugar in the European markets which decreased the prices. However, the surplus disappeared and sugar prices went up. Without the price caps, the price of sugar will rise to about HUF 500-600 (EUR 1.2-1.45).
The probable cause
Retailers must abide by the regulations and they must upkeep their usual orders in quantity. As they are not allowed to sell at higher prices, this causes a deficit. Therefore, there is no sugar shortage; the product just simply does not reach the customers. As for where all the sugar has gone nobody claims responsibility. However, it is predicted that the price caps will be abolished and so retailers will be able to finally sell for profits too.
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Source: Napi.hu
There’s a pattern here. It couldn’t possibly be the effect of price controls, could it?
https://www.investopedia.com/terms/p/price-controls.asp
“Over the long term, price controls can lead to problems such as shortages, rationing, inferior product quality, and illegal markets”
There may be a shortage of price capped white granulated sugar somewhere but there is no shortage of that sugar at the normal price. At least not in Újliptováros. The online ‘virtual’ supermarkets and small stores have shelves groaning with the stuff, prices from 269 huf per kg. Do people really worry about a difference of 19 huf?