On average, European sugar prices have risen considerably in the past year, but in Southern Europe people pay much more. In addition, Europe has to import quite a bit of sugar this year in order not to let the stocks dwindle to a critical state.
The average selling price in Europe in September was €512 per ton of white sugar, according to the European Commission's monthly sugar report. However, prices, production and use within Europe differ considerably, which is why Europe is divided into 3 different regions. The difference between region 1 (Central and Northern Europe) and region 2 (Western Europe) is minimal, but in region 3 (Southern Europe) prices are considerably higher because there is a shortage of sugar in these countries. For example, an average of €669 per ton of white sugar was paid in Southern European countries. In regions 1 and 2, where a lot of sugar is produced, significantly less was paid for sugar at €475 and €494 per tonne. That is still an average of €102 per tonne higher than in the same period in 2021. For Southern Europe, the price is even €210 per tonne higher than in the same period last year.
For the past season 2021/22, the European Commission (EC) sets the total sugar production at 16,65 million tons of white sugar and 0,6 million tons of isoglucose (fructose syrup). This season, the EC expects lower sugar beet yields, resulting in a lower sugar production of 15,5 million tonnes. Given the stocks in Europe, quite a bit has to be bought elsewhere in the world. This can lead to an even higher price in Europe. At the beginning of October this year, sugar reserves amounted to 2,73 million tonnes. That doesn't sound much, but that stock is not yet a critical level. Sugar stocks always increase from October onwards due to production starting from then until January. These stocks can rise above 10 million in January, but then decrease again because production comes to a standstill.
futures market sugar
In recent weeks, the sugar quotation in London has remained relatively stable when compared to the average for this season. At the time of writing, the Liffe is trading at $540 per ton. This means that the quotation reaches its highest point in 2 weeks. In recent days, the price per ton of white sugar has fluctuated between $530 and $540. The quotation is currently influenced by the agreements on sugar contracts in India. Given the increase this week, sugar is not yet affected by the falling oil prices.
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