The German sugar factory Südzucker does not want growers for the French subsidiary Saint Louis Sucre (SLS) to expand the beet area next season. The sugar producer is afraid of stiff competition on the European sugar market from Ukraine. This is evident from a letter seen by Reuters.
European sugar prices have broken records in recent months and due to a shortage of sugar in the EU, prices were above world market levels. One of the causes is the disappointing sugar beet yields in France. This season, the smallest area of beets was sown in France in fourteen years. With grain prices having started to slide downwards and sugar prices holding up reasonably well, French growers could discover beet cultivation again.
Shortage and surplus are close together
However, Südzucker, Europe's largest sugar manufacturer, is cautious about encouraging growers to sow more beets next season. "Our goal is to ensure that every ton of sugar produced in France perfectly meets demand and is valued as best as possible on the European market, in order to guarantee the best possible beet revenues," Reuter quotes from the letter from SLS . To achieve this, the SLS wants to keep the French beet harvest in 2024 the same as in 2024. One of the reasons that SLS is cautious has to do with the extra import of sugar from Ukraine. From October 2022 to July 2023, 390.000 tonnes of sugar from Ukraine entered the EU. That was 25.000 tons in the same period a year earlier. The French Association of Beet Growers also warns that European beet growers must be careful with area expansion. "The market could suddenly turn around and the European sugar price could fall by 30%, mainly due to the large supply from Ukraine," Franck Sander of the CGB told Reuters.
The SLS strategy is almost at odds with that of Cosun Beet Company. The Dutch sugar producer has increased the allocation percentage for 2024 to 110%. Cosun has also changed the delivery conditions, making it more favorable for growers to sow plenty of beets. The redistribution of pollutant will be introduced before 2024. The space of growers who have supplied below their allocation is divided among growers who supply above the permitted amount. In addition, Cosun is taking a more flexible approach to beet tourism (supplying beets grown by someone else).