Analysis Sugar
Import quota for sugar from Ukraine has effect
Sugar prices on the futures markets are picking up a bit after the dip earlier this month. However, the recovery is fragile according to various analysts. The European import figures reflect the restrictions that came into effect last year on sugar from Ukraine. Closer to home, in the Netherlands, growers have been able to get the beets for the coming harvest into the ground quickly, according to figures from Cosun.
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Choose the subscription that suits youSugar was on the rise in both London and New York. In New York, sugar closed at its highest level in five weeks. In London, it was the highest level in two weeks. According to analysts, the main reason for this increase is the increase in the price of oil. This makes it (mainly) more interesting for sugar cane processors to produce more ethanol instead of sugar.
However, a large sugar harvest in India is dampening optimism on the sugar market. The agricultural attaché of the US Department of Agriculture predicts that the sugar harvest in India for the 2025/26 season will amount to 35 million tonnes. That is 26% more than last season. According to the weather models, the monsoon - which has almost reached the south of the subcontinent and will reach the north in early July - will bring sufficient precipitation. Sugar cane yields are therefore higher. In addition, the area of sugar cane has been expanded, according to the attaché.
On a global scale, we will be eating into the sugar supply somewhat in the 2024/25 season, according to the International Sugar Organisation (ISO). According to the organisation, consumption will be 4,9 tonnes higher than production. In the previous forecast, a deficit on the balance sheet of 2,5 million tonnes was still being calculated. We do not need to fear that we will run out of sugar. The final stock is estimated at 94 million tonnes with a consumption of 180 million tonnes.
Less demand for sugar in Europe
In Europe, there does not seem to be any expansion of the sugar beet area. Cosun lowered the allocation percentage from 110% in campaign year 2024 to 100% this season. The cooperative did this because it expects that there will be less demand for sugar. And Cosun does not seem to be the only one who is anticipating this. Other European sugar producers are also aiming for fewer beets.
Sowing beets in the Netherlands has gone very smoothly. According to Cosun, the average sowing date is 26 March. That is about a month earlier than the last two years when the average sowing dates were 25 and 26 April respectively. The last time the average sowing date was in March was in 2014 when it was also 26 March.
According to the latest figures from Cosun, 1.095 hectares of beets have been oversown this season. That is less than the 1.269 hectares last season, but more than the 487 hectares in 2023. The main reason for oversowing this season is drift damage followed by insect feeding damage.
Import quota
The measures taken by the EU against the import of sugar from Ukraine are clearly visible in the European import figures. Under pressure from mainly a group of Eastern European member states, the European Commission has reintroduced quotas for sugar from Ukraine. These import restrictions were abolished after the Russian invasion in February 2022. Partly due to the sales opportunities towards the EU, sugar beet cultivation in Ukraine expanded in the years after the invasion. This spring, fewer beets are expected to be sown compared to the past two years, according to some analysts.
