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Price Levels Somewhat frustrated, Tallinn consumers could note that while paying the equivalent to some 0,84€ for a kilo of sugar one year ago, this year’s August price had gone up to 1,42€ - almost a 70% price increase. At the same time, and even a bit more frustrated, Tallinners could read that a kilo of sugar in Helsinki costs 0,82€ and the equivalent to 1,14€ in Stockholm.

The oligopoly, controlling 95% of the Estonian sugar import, and Gunnar Andersson, CEO at Nordic Lint and a member of the SCCE, have different opinions on the reasons behind the price hike.

According to the Estonian newspaper Postimees, 95% of Estonia’s sugar imports are controlled by two companies. Commenting the price hike, a spokesperson for one of the companies told Postimees that “our long-term contract with Europe’s largest sugar producer expired last September and we had to start buying sugar from the more expensive open market”.

- Since the mid 1970’s, the international trade of granulated sugar has been regulated through the London Commodity Exchange [merged in 1996 with LIFFE – the London International Financial Futures and Options Exchange], says Gunnar Andersson. The EU has introduced a sugar import fee, currently 0,4146€ per kilo and the August 2011 world market price on sugar is 0,525€ per kilo plus shipments and trade margins.

- It seems unlikely that there should be any bigger difference in the sugar import prices for Estonia and Finland. The different sell out prices must be the result of different trade margins in the two countries, concludes Gunnar Andersson.

Eurostat

As the sugar prices were discussed in Estonia, Eurostat - the statistical office of the European Union published their 2010 price level indices for consumer goods and services among the EU27 countries plus Norway and Switzerland.

Switzerland ended up as the most expensive country with Sweden ranked 5th (a shared ranking with Luxembourg) and Estonia on a 19th place. Bulgaria was the less expensive country ending up with a total index level at 51.

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The inflation will of course change the figures for this year. Year-on-year, Estonia is currently at 5,3%, the highest inflation in both the eurozone and among the EU27 countries, and Sweden has a 3,3% inflation rate.