Record high sugar prices in the European Union, which are almost three times higher than a year ago due to extreme weather conditions and soaring energy prices, are forcing confectioners to think about reducing production, Reuters reports.

The record price of the widely used food product is another deterrent for EU policymakers trying to control inflation and curb the cost-of-living crisis.

Sugar traders and industry experts say spot prices for refined white sugar on the continent are trading at about 1,050 euros per ton, the highest level.

In contrast, world market prices are about half that level.

Sugar production is among the most energy-intensive industries and is particularly dependent on gas in the EU.

Indicative EU gas prices are about 700% higher than levels at the beginning of last year.

The German confectionery industry association BDSI said Germany, the largest producer of sweets and snacks in the EU, is at risk of losing its competitiveness even compared to European countries, let alone international ones.

Germany has been hit particularly hard by cuts in Russian gas supplies.

The European Commission expects sugar production to drop by 6.9 percent in the 2022/23 season (October-September) to 15.5 million tons due to a shrinking crop area and severe summer drought, while consumption will significantly exceed those levels at 16.6 million tons.