Has the bottom been reached in the European sugar market?

Sugar beets in the EU were generally sown relatively early and have developed well in recent weeks. The European Commission’s scientific bureau, the JRC, expects the upcoming harvest in the EU to be 6% above the five-year average. The yield is estimated at 77,9 tonnes per hectare. In almost all Member States, yields are equal to or above average. Italy stands out positively. With a forecast for the harvest of 64,1 tonnes per hectare, the yield is 12% above the five-year average. Sufficient moisture in the soil has a positive effect on the beets there. Romania is the only country in the EU where the yield is disappointing in the JRC forecast. At 33,2 tonnes per hectare, the yield is 5% below the five-year average.

The recent beet harvest in Germany was not disappointing at all. At least that is what German sugar producer Nordzucker writes in the explanation of the figures for the 2024/25 financial year. For the European sugar price, this good harvest was less favourable. "Due to the very good beet harvests and the resulting large quantities of sugar, the sugar price in Europe fell much more sharply than initially expected," writes Lars Gorissen, director of Nordzucker. Turnover fell from €2,92 billion last year to €2,77 billion this financial year. Operating profit (EBIT) took a bigger hit and fell from €421 million to €100 million.

According to Gorissen, we have probably reached the bottom in the European sugar market. "Together with our growers, we are helping to relieve the pressure on the market." The smaller area of ​​beets that seems to be the case throughout the EU this growing season is the most important instrument.

The sugar price in the EU is even taking a very cautious step upwards. At least that is what the figures from the sugar consultation of the European Commission show. The smaller beet area in the EU will undoubtedly play a role in this. The fact that limits have been set for the import of sugar from Ukraine could well play a bigger role.

The International Sugar Organization (ISO) expects that 5,5 million tons more sugar will be consumed than produced in the season. In the previous forecast, the organization still estimated the deficit at 4,9 million tons. We do not need to be afraid that we will run out of sugar. According to the ISO, the final stock will be 94 million tons. Production is estimated at 175 million tons. It is mainly the sugar yields in India and Brazil that are disappointing, according to the ISO figures.

On the futures markets in London and New York, traders are not yet so impressed by the ISO figures. On both exchanges, the price fell back to the lowest level since January.