News Sugar beets
Suiker Unie writes red numbers for the first time
For the first time in its history, Suiker Unie is expected to make a loss. In the 2018 financial year, Royal Cosun's sister companies will absorb this loss. The pain is expected to be very noticeable in 2019, also for beet growers.
In view of the exceptionally low sugar prices in Europe and on the world market, Cosun chairman Dirk de Lugt expects Suiker Unie to make a loss this financial year for the first time in its history. Which writes he in his foreword in the October Cosun Magazine. "Part of this loss has to be taken in the current fiscal year."
Dirk DeLugt
Group result as shock absorber
Fiscal year 2018 is expected to be colored by black numbers. Aviko, Sensus, Duynie and SVZ make a positive contribution, which means that the group result is positive, De Lugt thinks. The consequences for the Netherlands will only be really noticeable in 2019. De Lugt supports the strategy whereby the other activities support the beet price and thus 'artificially keep it high'. "In this turbulent sugar year, this proves to be valuable," he writes. "Nevertheless, we have to adjust to a considerably lower beet price than in recent years. Lower than we would like to see."
Cosun has already announced a minimum price of €2018 per tonne for the 2019-32,50 season, despite the situation on the sugar market. "At current grain prices, grain is a good alternative to sugar beet, for which an average of €20 per tonne is paid in Europe," writes secretary Jan Willem van Roessel. "When the sugar company makes a loss, there is hardly any member surcharge on the €32,50 per tonne." The cooperative paid a base price of €2017 per tonne for the 47,25 harvest. In 2016 that was €44 per tonne.
Surplus reduced
"India and Thailand are currently strongly influencing the international sugar market," continues Van Roessel. "India produced 12 million tons more sugar and in Thailand exports increased by almost 50%. In the EU, the product increased from 3,4 to 4,3 million tons of sugar last year. Exports doubled, while imports halved. the surplus on the world market will be lower this year, because consumption is rising."
The European contract prices for 2019 are considerably lower. At the moment, sugar is sold below cost price, for an average of 346 euros per tonne. Suiker Unie also receives this prize. Due to drought, European sugar production is lower this harvest, but a production surplus remains. Like Cosun, sugar producers are calling on their member growers to grow fewer beets in 2019. The lower European production is mentioned as a basis for a price recovery, but there is no prospect of an actual recovery as yet.
Niels van der Boom
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