Valentine’s Day sweethearts will need to fork out more for meals and sweet treats this year.
Candy and chewing-gum prices rose 12.2% in January over the previous year, after rising 11.6% in December, according to government data released Tuesday. Similarly, sugar and sugar substitutes were 13.5% more expensive last month.
But inflation continues to ease. Consumer prices were up 6.4% in January from a year ago, a slight drop from 6.5% in December 2022 and from 9% in summer 2022, which marked a 40-year-high. Annual food inflation, however, hit 10.1% in January.
Traditional dating activities and gifts are also pricier this year. Dining out was 8.2% more expensive in January compared with last year, while indoor plants and flowers cost 5% more than a year ago, easing slightly from 6.3% in December.
“Increased cost of labor, manufacturing, shipping, warehousing and energy — along with disruptions in supply chains — are all responsible for why candy is more expensive for Valentine’s Day,” said Dallin Hatch, a data expert for Pattern, an e-commerce analytics company, in an email to MarketWatch.
The rise in sugar prices is directly linked to the Russian invasion of Ukraine, said Curt Covington, senior director of partner relations at AgAmerica Lending, a national agriculture and infrastructure lender. As the war disrupted corn imports, the demand for domestic corn soared — and pushed up domestic corn prices.
Corn syrup goes into a variety of candies — from lollipops to candy bars — and has become the main sweetener in the U.S. mainly because it’s cheaper than sugar cane and sugar beets, analysts say. Corn is also used in many farm products, from animal feeds to baked goods.
Another reason for the spike in sugar and candy prices: Southern Brazil was impacted by drought conditions wrought by La Niña, an extreme weather condition, which resulted in harvest failures for sugar cane and sugar beets — two other main sources of sweeteners, said Matthew Sherwood, senior Europe and lead commodities analyst at the Economist Intelligence Unit.
And part of that sugar crop is also used in ethanol production. “More expensive oil increases demand for ethanol, which causes mills to refine less sugar, thereby raising prices,” Covington said in an email to MarketWatch. “While the U.S. is a major producer, it imports close to 30% of its annual consumption, and so domestic prices are affected by global developments.”