Beet sowing is going well, but drought is lurking

The price of white sugar in the EU fell more sharply in February than the prices on the futures markets in New York and London. This is evident from the market update of the European Commission of 28 March. In February, the average sugar price in the EU fell by 3,2%, while the decline in London and New York remained limited at 1,4% and 1% respectively. Incidentally, sugar is on the rise in London and New York this week.

Following protests by European farmers, the EU has reintroduced restrictions on the import of sugar from Ukraine. The effect of this is clearly reflected in the import figures. In the 2022/23 season, Ukraine exported 400.000 tonnes of sugar to the EU, rising to more than 2023 tonnes in 24/500.000. This is well above the quota of 20.000 tonnes before the Russian invasion. This season, hardly any sugar was exported from Ukraine to the EU. Turkey is now the largest buyer of sugar from Ukraine.

In the Netherlands, unlike the last two years, sowing beets is going smoothly. Cosun has not yet published an update on how much has been sown, but IRS reports that a lot has been sown in recent weeks and that the beets are now emerging on early-sown plots. Lack of moisture is now becoming a problem, especially for seeds that have just germinated or still have to germinate. Rolling with the Cambridge shortly after sowing promotes the connection with the subsoil, and if the beets still have to be sown, the IRS advises to prepare the soil as shallowly as possible. Because no rain is expected, it may be useful to irrigate, according to the institute. "In addition to preventing germinated seed from drying out again, emergence irrigation also ensures rapid and even emergence." Especially if artificial fertilizer has been spread and/or soil herbicide has been sprayed, it is important to keep an eye on the EC of the water to prevent salt damage.

Expensive real
According to analysts, the fact that sugar is on the rise on the international markets this week is due to a rise in the Brazilian real against the dollar. Sugar from Brazil is becoming relatively expensive on the world market. The sugar yields in Brazil are also somewhat lower than previously estimated. According to Unica, the sugar production in the central part of Brazil is 5,3% lower until mid-March compared to last season. The sugar production is therefore at 39,98 million tons. Commodities trading house Czarnikow lowered the harvest forecast for Brazil from 43,6 million tons to 42,0 million tons.

The International Sugar Organization (ISO) has widened the global sugar market deficit. In November, the ISO estimated an additional 2,51 million tonnes of sugar to be consumed in the 2024/25 season, which was increased to 4,88 million tonnes in the March update. Global sugar production was reduced from 179,1 million tonnes in November to 175,5 million tonnes in the most recent estimate.

A price-depressing signal for the sugar market came from India at the beginning of this year with the news that the country is considering relaxing the export quotas that have been in effect since 2023. Whether that will actually happen remains to be seen. According to the association of sugar producers in India, production this season is down 17,5% compared to last season. That would mean that India has the smallest sugar harvest in five years at 26,4 million tonnes.