Sugar beets in Europe have benefited from the favorable weather in recent weeks, resulting in yields heading towards the long-term average with a small plus. The sugar futures contract in London has also recorded a plus again in recent weeks.
The white sugar contract on the London futures market has risen further in recent weeks and remains near the highest price level in 12 years. At the time of writing (Tuesday morning, September 19), the November contract is at $740,20 per tonne and last week even broke the $750 per tonne barrier. This means that the contract is significantly higher than in previous months. Raw sugar on the futures market in New York shows the same trend.
Sugar prices continue to rise due to ongoing concerns about global sugar availability. Even though Brazil is heading for record sugar production this season, production elsewhere in the world is substandard. There are particular concerns in Asia due to disappointing sugar cane yields. With the start of the weather phenomenon El Niño, whereby the monsoon rains in large parts of Asia usually provide considerably less water than normal, concerns about long-term availability have not diminished.
The weather phenomenon is already in effect now. In India, the world's second largest sugar exporter after Brazil, sugar cane yields in the main growing region of Maharashtra are likely to be sharply disappointing, various sources reported. As a result, the Asian country could introduce export restrictions as it previously did on various types of rice and wheat. Yields are also estimated to be far below average in other Asian countries, such as in Thailand. These developments are driving up global sugar prices further.
Growing weather
After a difficult growing season in 2022, sugar beets in Europe are looking much better this year. Despite the later sowing in many countries this spring, the beets are now in good condition and the beet campaign has already started in several countries. The ample rainfall and slightly higher than normal temperatures in Europe have been beneficial for beets, according to the monthly analysis by the Joint Research Center (JRC) of the European Commission, which was released on Monday 18 September. Carrot yields are improving in western and central Europe compared to a month earlier. No statements are made about the sugar percentage, but it is obvious that it is slightly lower than the dry, sunny season of 2022.
The JRC currently estimates that the European beet yield is an average of 74,5 tons per hectare. That is 4% higher than the 5-year average. In France, the beet harvest is even estimated to be 8% higher than the 5-year average. Few problems with the yellowing virus have been noted this season despite the ban on neonicotinoids in France. In the Netherlands, the yield is estimated at an average of 83 tons per hectare, which represents a small plus of 1% compared to the 5-year average.
Increase in beet sugar in the Netherlands
Cosun Beet Company also indicated last week that the growing weather had a positive effect on yield expectations in the Netherlands. They do not calculate with carrot yields but with beet sugar per hectare. Due to sufficient rainfall and high solar radiation in the recent period, the beet sugar yield has been adjusted to 14 tons instead of the previous 13,3 tons that was expected. The beet processor does expect to produce 5% less beet sugar this year than last year. This is due to a slightly smaller area and a lower beet sugar yield per hectare than last year's 14,5 tons. The 20 beet campaign will officially start on Wednesday, September 2023 in the two factories in Dinteloord (North Brabant) and Hoogkerk (Groningen).