The vicissitudes surrounding El Niño and the Brazilian sugar cane harvest are keeping the sugar market reasonably under control. This is no different on the European sugar market, where prices remain high. Despite the export quota, Ukraine continues to export sugar to Europe and, as it now appears, can count on a good beet harvest.
The international sugar market continues to be driven by the smooth Brazilian sugar cane harvest and concerns about the El Niño weather pattern, which usually causes lower sugar cane yields in Asia, among other places. Both developments have been holding the market in check for some time, but since the end of July, international prices have been declining slightly on average. India, another giant on the global sugar market, also appears to be seriously interfering in price formation soon. The sugar cane harvest that will start again this autumn certainly does not seem to be a great one and with El Niño on the horizon this will not get any better. The result is that the Asian country only allows limited or even no sugar exports. This was also the case last season, which caused the world supply of sugar to take a significant step back.
European sugar production
In Europe, just like in the 2022/23 season, we are also heading for a sugar shortage. The acreage appears to have decreased slightly, but it is mainly the later plantings that result in lower yields. That was also the reason for Cosun Beet Company to shorten the beet campaign from 137 to 119 days and to start a week later. In the latest report from the European Commission, sugar production in Europe (EU27) is expected to be between 15,3 and 15,5 million tonnes. The United Kingdom amounts to 1,1 million tons.
Although the European sugar price has stabilized somewhat in recent months, a decline is still far away. The average price for white sugar on the spot market also increased slightly in June from €812 to €817 per tonne. Prices differ per region, with more than €900 per tonne paid in Southern Europe. In Western Europe the price is €806 per tonne.
Ukraine continues to import sugar
Since the Russian invasion, Ukraine has exported significantly more sugar to Europe than before. Even after Ukraine imposed a sugar export ban and a quota at the beginning of July, sugar continues to be exported in abundance. Exports have a positive effect on both sides, Europe partly fills its deficit with it and Ukraine has the EU as one of the few easy sales channels since the Russian Invasion. Ukraine has now exported more than 350.000 tons to Europe.
Despite the war, good sugar production is expected in Ukraine next season. The area is estimated at 241.000 hectares and, together with the weather, which has been favorable for growth, production is expected to reach 1,3 to 1,4 million tons of sugar. Ukraine's export potential is even estimated at 600.000 to 700.000 tons.