Sugar Talk Sugar Talk Sugar talk logo

What’s happening with wheat?

23/03/2023 By Ben Eastick in News & updates Invert sugar syrup, Market news

The price of wheat has more than doubled over the last 12 months, and the prices of products made from wheat—like glucose syrup—have shot up as a result. Availability has fallen, impacting on the demand for pure sugar products made from natural sugarcane and sugar beet, as industrial users seek alternatives. Why has this happened, and why should sugar buyers care? 

The wheat price explosion 

A perfect storm of global events has pushed the price of wheat to its highest ever level. 

As you can see on the 10-year graph below, the price per bushel was bobbing along well under 700 dollars for most of the last decade. Then, Russia invaded Ukraine and disrupted supply from a region that was producing more than a quarter of the world’s wheat exports. Today, in early 2023, we’re seeing the crest of a wave that’s been swelling for some time.

The Russian invasion of Ukraine saw wheat prices rocket.

Why did this happen? The war in Ukraine is just one part of a complex global picture. 

Major wheat producer Australia had a wet harvest in 21/22, kicking off a season of price rises not helped by pandemic-related supply issues. Labour shortages in the fields and ports and logistics problems—like the shortage of ships—added to the unpredictability.   

The biggest jump—immediately following the Ukraine invasion—was part of a picture made up of many convergent factors. 

Blockades at the Ukrainian borders reduced supply to the western hemisphere, while the energy price shock meant that the natural gas and petrochemicals that are used for feedstocks for many agrochemicals, including fertilisers, rose to unprecedented highs. 

Even the price of diesel for tractors spiked beyond the means of many farmers.  

A lack of ships to transport wheat from source to destination has compounded the supply problem.

All of this has a clear knock-on effect: As the cost of energy and hydrocarbons went through the roof, many of the supply chain costs for wheat and other products—sugar included—did too. 

What is this doing for wheat-based products? 

Worldwide, wheat is cultivated on around 220 million hectares, making it the number one global crop. As well as being a major raw material for many food and beverage products, it’s also the source of many sweetening products, such as high-fructose corn syrup. 

Wheat, alongside corn, is the raw material for ‘corn syrup’, the name you might see being used for glucose syrup, a syrup used in a huge amount of food, beverage and pharmaceutical products. This syrup is produced from refined wheat and corn starch by adding an enzyme and converting the starch to dextrose, maltose, and dextrins.  

High fructose corn syrup (HFCS) is made from corn syrup, by converting some of the glucose into fructose. Also known as ‘isoglucose’ or ‘glucose-fructose syrup’, it’s used to sweeten a diverse range of foods and beverages, from confectionery and soft drinks to sauces, breads and crackers. 

The most common forms of HRCS contain either 42 percent or 55 percent fructose, referred to in the industry as HFCS 42 and HFCS 55. HFCS 42 is mainly used in processed foods, cereals, baked goods, and some beverages. HFCS 55 is used primarily in soft drinks. 

The availability of high-fructose corn syrup (HFCS) has dwindled as wheat has risen in price.

As the cost of wheat has increased, so has the cost every food product that comes from it: Corn/glucose syrup is just one example. 

How does this impact sugar demand? 

Although sugars that come from wheat start out life very differently to the pure cane and beet derived sugars that we produce here at Ragus, the volatility of today’s global wheat market is highlighting the link between them. 

Expensive wheat clearly means wheat products, like noodles, pasta and bread, are more expensive too. But because other very common, but lesser-known food product ingredients—like corn or glucose syrup—also come from wheat, right now, many brands are looking for alternatives. 

Glucose syrup is popular with food and beverage manufacturers because it has a light, sweet taste and a viscosity that works perfectly in a huge range of products, but invert sugar syrup is almost identical in texture, flavour and other functional properties. Research suggests it may also be healthier choice, with scientists and experts disagreeing on whether HFCS places a heavy burden on the liver and contributes to metabolic dysregulation

Invert sugar syrup is a great replacement for high fructose corn syrup, also known as HFCS.

The current wheat crisis is forcing some manufacturers who produce food or beverages on an industrial scale to reformulate their recipes. 

At Ragus, we’ve been helping customers reformulate their food and beverage products since 1928. Whether as a response to supply chain failures, consumer feedback or rising global costs, our pure sugars give manufacturers alternatives to wheat-based syrups that bring the same reliable, reassuring sweetness and mouthfeel to their best-loved products. 

Ragus manufactures bulk sugars for industrial applications, maintaining supply and helping customers to reformulate their products throughout challenging times in the food and beverage market. For more sugar news and Ragus updates, keep browsing SUGARTALK and follow Ragus on LinkedIn.  

Ben Eastick

A board member and co-leader of the business, Ben is responsible for our marketing strategy and its execution by the agency team he leads and is the guardian of our corporate brand vision. He also manages key customers and distributors.

In 2005, he took on the role of globally sourcing our ‘speciality sugars’. With his background in laboratory product testing and following three decades of supplier visits, his expertise means we get high quality, consistent and reliable raw materials from ethical sources.

View more