Despite the drought, sugar beets are in reasonable shape in Europe. The sugar factories should therefore continue, but that is partly not the case in Ukraine. Due to the war and high gas prices, more than a third of Ukraine's sugar factories are in danger of not starting.
The fighting in the northern, southern and eastern regions of Ukraine has already significantly reduced the area under sugar beet. The hectare yield also appears to be lower than expected. But even if everything is harvested soon, the sugar factories still have to run. The fighting in combination with sky-high gas prices means that 10 of the 32 sugar factories in Ukraine will not start up as of September 1. This was reported by the producers' union Ukrtsukor two days ago (August 16).
According to the Ukrainian Ministry of Agriculture, 180.400 hectares of sugar beets have been sown this year. This leads to an expected production of 1,08 million tons of sugar from 7,8 million tons of sugar beets. Last season production was more than 1,3 million tons of beet sugar. Beet sugar production is approximately the same as in the Netherlands, which is number 4 in Europe when it comes to tons of sugar. By the way, sugar beet cultivation in Ukraine has decreased significantly compared to 30 years ago. Then 5 million tons of beet sugar were produced. Production fell to 1 million tonnes due to competition in export markets for cheaper cane sugar.
Precipitation in time for sugar beets?
Sugar beets in Europe are also suffering from the heat and drought. Although the crop was above average in Europe until last month, the drought and heat now really seem to be taking their toll. Growth is hampered, especially in France and parts of Germany, after a good start. The two countries that together account for approximately half of European sugar production finally saw the first rain showers since the beginning of this week. A serious amount of precipitation has fallen, especially in France, and there will certainly be more this week. The extreme heat is also no longer an issue. Whether it is sufficient remains to be seen, but as the French sugar company Tereos previously announced, they expect an above-average hectare yield under normal weather conditions.
The rainfall deficit in Belgium led to a limitation of the use of surface water for agriculture. The sugar producing company Tiense therefore decided to intervene and help the farmers in the region. The company's factory purifies water and has made it available to farmers in the summer for several years. In total this concerns 1 million liters of water, about 40 trucks per day, that the entrepreneurs can collect.
Sugar prices are increasing slowly
After the sugar quotation on the Liffe closing price reached its lowest point since April at the end of July, the quotation is now rising again. Sugar prices fell because petrol prices fell in Brazil. As a result, the blending of biofuels came under pressure, causing ethanol prices to fall. As a result, the production share of bio-ethanol is expected to decrease and sugar production to increase. This results in extra sugar on the world market. The sugar price is now slowly rising again and the Liffe closing price is €547 at the time of writing.