As I browse the web researching various topics concerning the EU and UK sugar markets, I've been bookmarking interesting weblinks. Some of these are news clippings, some are links to official documents, and some are interesting data sources.
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On November 30th, Sucden and a group of Moroccan institutional investors (MCMA, MAMDA, CIMR, RCAR) have purchased Wilmar’s 30.05% stake (of which 10% for Sucden) in Moroccan sugar producer Cosumar. Sucden and Cosumar intend to develop further synergies, focusing on marketing Moroccan sugar in the world market. Serge Varsano, Chairman of the Management Board of Sucden, commented: 'We are very pleased to become a shareholder of Cosumar, the sole sugar producer in Morocco, where our company started its sugar business over 70 years ago. Sucden's expertise and footprint in the world sugar market will benefit Cosumar's plans to expand its international sugar activities.'
NFU Sugar has welcomed the government’s decision not to expand the ATQ (Autonomous Tariff Quota) for raw cane sugar following a snap consultation in September. Introduced in 2021, the ATQ allows tariff-free access for 260,000t of raw cane sugar into the UK from anywhere in the world. The NFU responded to September’s extremely short (two-week) government consultation, rejecting the concept that expansion of the ATQ might reduce current high sugar prices and so help alleviate inflationary pressure on the cost of a basket of consumer goods. It also met with Defra, the Department for Business and Trade, and Treasury officials. On 15 November, the government announced that it would not be expanding the ATQ for the remainder of 2023. Since the introduction of the ATQ however, imports of raw cane sugar from ACP/LDC producers have fallen year-on-year, contracting by a total of 73%, while during the same period imports from Brazil have increased by 206%. Just 16,000t of raw sugar for refining has been imported from ACP/LDC countries with duty-free and tariff-free access in 2023 according to HMRC data, suggesting a near complete displacement of these traditional suppliers with world market raw sugar. The raw sugar cane ATQ, regardless of its size, constitutes a tangible exclusion of the developing economies the UK Government claims it is committed to supporting.
At a press conference today, Président of the Confédération Générale des planteurs de Betteraves, M. Franck Sander said, “Ultimately 2023 will be quite a good year with a yield in line with the average and a price around 55 euros per tonne". The CGB estimates the French sugar crop will amount to around 3.7 million tonnes, excluding "jus vert" (for ethanol).
Meeting in London, Global Sugar Alliance members celebrated the positive contribution of the sugarcane industry to sustainable global food and energy security. They acknowledged the role of ethanol, derived from sugarcane, as an environmentally friendly alternative to fossil fuels and and renewed their call for all countries to fix the World Trade Organization (WTO). Members welcomed India’s ethanol programme and acknowledged the major contribution the programme is making to India meeting its international emissions reduction commitments.
Net zero outcomes and supply chain incentivisation were key themes of NFU President Minette Batters' keynote speech at this year's ISO (International Sugar Organisation) seminar in London. Opening her speech, Minette spoke about how farmers have a vested interest in being at the forefront of climate change, with their businesses experiencing its consequences more than most. She emphasised that net zero outcomes must be consistent across industry, the supply chain and Government, and that policymakers worldwide must work together to understand that both food production and environmental protection are “two sides of the same coin and cannot be viewed in isolation of each other”.
The European Parliament has rejected a Commission proposal on sustainable use of plant protection products. Following a debate on Tuesday 21 November, 299 MEPs voted on Wednesday to reject the Commission’s proposal as amended by MEPs in plenary, with 207 supporting the proposal and 121 abstaining. With this vote, Parliament has effectively rejected the Commission proposal and closed its first reading. The Council still has to decide on its own position on the proposal to determine whether it is definitively rejected or returns to Parliament for a second reading.
Sugar, molasses and coffee trader ED&F Man said it has received several takeover approaches. The company “has received several unsolicited approaches,” according to a spokesperson. "ED&F Man Commodities had an excellent FY22-23 and continues to perform strongly, the spokesman said, adding, “Whilst it is very much business as usual, the board has a duty to consider what is in the best interests of all stakeholders and that is what it is doing”. The interest comes after Marex Group bought ED&F’s brokerage business for about $220 million last year as the group restructured after several years of losses.
A modeling study by the Technical University of Munich and the University of Liverpool recently published in the specialist magazine “PLOS Medicine” looks at the sugar tax and possible effects on the occurrence of certain diseases. Commenting on this, Dr. Philip Prinz, head of the nutritional sciences department at the Wirtschaftlichen Vereinigung Zucker, said: “The conclusions are based on the assumption that the sugar tax prevents obesity and secondary diseases. There is no evidence for this. Even in countries where such a tax has already been introduced, such as Great Britain or Mexico, obesity in the population is not decreasing. It is noteworthy that the study authors assume in their modeling that the sugar tax saves a maximum of 5.9 g of sugar per day. That corresponds to just 24 kcal. It is completely unclear whether this would lead to weight loss, because the question arises as to whether the calories would then be absorbed through other foods or drinks. But that is crucial. Because the calorie balance counts for body weight.”
European Union beet sugar production for 2023/24 is forecast at 15.5 million tons from nearly 1.4 million hectares of sugarbeets. This would be a 3 percent increase in production compared to 2022/2023, despite a forecast 6 percent reduction of beet acreage in France. In the last 5 years, France accounted for 28 percent of total EU sugarbeet area harvested on average. However, the reduced beet acreage in France is forecast to be balanced by increased plantings mainly in Poland (+ 19 percent), Spain, Romania, Slovakia, and Hungary. On January 19, 2023, the European Court of Justice (ECJ) ruled that Member States cannot grant temporary emergency authorizations for the use of banned neonicotinoids on sugarbeets. This has caused many French farmers to switch to other crops.
The new health secretary has insisted there is no conflict of interest with her husband's senior role in the British sugar industry. Victoria Atkins, who is the Louth and Horncastle MP, is married to British Sugar managing director Paul Kenward. Ms Atkins said she would recuse herself from some government business if necessary. The Department of Health and Social Care said Ms Atkins had declared all her outside interests. "Anyone who knows me knows that I am very, very independently minded," Ms Atkins said. "I voted enthusiastically for the sugar tax when that came before Parliament."
The future of the sugar industry will be decided in Brussels next week. Factory employees and beet growers are looking with great concern at the EU Parliament's vote on the regulation on the sustainable use of plant protection products (SUR) and are calling for decisive adjustments. The corresponding Commission proposal currently provides for a blanket ban on plant protection products in sensitive areas. The Environment Committee's proposal to only allow ecological or so-called low-risk pesticides is also unacceptable. The regulation would also affect large areas in the catchment area of sugar factories. Conventional beet cultivation would no longer be possible here. As a result, sugar factories could no longer operate at full capacity and, in the worst case scenario, would have to close. The chairmen of the general works councils of Südzucker, Nordzucker and Pfeifer & Langen point out the consequences: “Our plants in Germany, with their approximately 5,700 employees, are a very attractive employer in their respective regions and create over 50,000 additional jobs in upstream and downstream areas. We are missing beets because farmers are giving up cultivation and factories are closing. Then the sugar comes from overseas. This cannot be the solution for sustainable food security in Europe.”
Futures markets have become an almost essential part of the marketing strategy of farmers and their cooperatives, and they also exist in order to attract financial organizations, which provide the necessary liquidity. But while speculative practices contribute to increased price volatility, the profits they generate in times of crisis attract criticism, as in a recent report from CCFD-Terre Solidaire and Foodwatch, who judge the current regulations to be insufficient in terms of transparency. The Council and Parliament agreed on 29 June to revise the regulation in force. Sufficient provisions to limit excessive price volatility?
UK Govt proposes statutory instrument revoking basic payments for farmers in England from next January and providing for delinked payments from 2024 to 2027 which can be paid without a requirement to have eligible land. https://www.legislation.gov.uk/ukdsi/2023/9780348253344/contents
NFU Sugar has clarified its response to a statement issued by Defra regarding the 2024/25 sugar beet contract negotiation. NFU Sugar welcomes the clear direction from government that negotiations with British Sugar to set a price for sugar beet this year should resume. You can read Defra's statement in full at: GOV.UK | Update on beet sugar negotiations. The government has stated explicitly “that there is a well-established process in place to agree the sugar beet price”. Defra adds: “It is very important that all parties involved now continue to follow that process and reach a mutually acceptable outcome.”
Tereos announces the pending sale of the Tereos UK and Ireland (TUKI) site in Normanton, West Yorkshire, and its business-to-consumer (B2C) activities to UK based T&L Sugars Limited (TLS). The Tereos UK facility packs and distributes white granulated, baking and specialty sugars to food retailers and wholesalers in the UK, under the “Whitworths Sugar” brand and private label brands. The transaction only concerns B2C activities; Tereos will keep the industrial B2B activities which will continue as TUKI. TLS imports raw cane sugar and refines it into sugar for consumption at its refinery in London. This sugar is then supplied to industrial customers or packed and distributed to customers in the B2C channel under British private labels, as well as under the “Tate & Lyle” brand. Tereos is very pleased that TLS is acquiring the UK site and securing the future for all the experienced employees, the factory and storage facilities. It will enable the B2C market in the UK to maintain the same level of quality and services with a warranty of supply. Finalisation of the transaction will take place upon completion of the UK Competition and Markets Authority approval process.
British Sugar has today contacted its 2,300 sugar beet growers with details of its contract offer for the 2024-25 growing season. It is a contract offer built around choice and flexibility, including: Security of a core £38/t price for beet delivered; Added potential with a market-linked bonus; which would deliver over £40/t in today’s sugar market; Peace of mind if growers choose our Yield Protection contract for a core price of £37/t; Easing growers’ cashflow with our unique cash advance.
A last-ditch attempt to secure a free trade agreement with the European Union over better access for Australian meat and protections for continental goods has fallen apart before the “end game” negotiations could start, a move that will set any deal with the bloc back years.
According to a delusional report published by Action on Sugar, the UK faces rising ‘sugar pollution’: the impacts on public health and the environment of producing, importing and consuming too much sugar. The UK sugar supply is equivalent to over two-and-a-half times the amount needed to meet the population’s maximum recommended intake, driving tooth decay which hospitalises over 600 children a week, and contributing to levels of obesity that cost the NHS around £6.5 billion a year.
The Cristal Union cooperative announces the launch of RegAg, an agroecological approach for its members. The efforts of the latter engaged in the implementation of agroecological and low carbon practices will be remunerated, from this 2023 harvest, by the payment of a specific bonus.
2023/24 EU sugar production is forecast at 15.6 million tonnes (close to the 5-year average) as sugar beet planting area, beet yields, and sugar content are expected to increase. EU production of isoglucose, which was estimated to fall by 24% in 2022/23 due to the consequences of the 2022 summer drought, high feedstock, and input costs in main EU producing countries, is expected to partially recover in 2023/24. Thanks to the production increase, EU availability is higher. Therefore, EU sugar imports are forecast to decline to 1.9 million t in 2023/24 (25% below the estimated post-quota record of 2.5 million t imported in 2022/23). Imports should nevertheless stay above the 5-year average thanks to high EU sugar prices and increased availability of Ukrainian sugar, while EU exports compared to 2022/23 should increase 29% to 0.75 million t. Total EU consumption of sugar in 2023/24 is expected to remain resilient to high prices and relatively stable compared to 2022/23. It should continue to be supported by strong EU exports of sugar in processed products, while industrial use of sugar is due to partly recover. Ending stocks of sugar, which are estimated at 1.4 million t in 2022/23 (-9.6% year-onyear), are expected to be at a similar level also at the end of 2023/24 season.
The Sugar Economic Association (WVZ) published its second harvest and production estimate for 2023 today. According to this, sugar beets are grown on an area of around 365,000 hectares in Germany. The estimated sugar beet yield is 79.2 t/ha. For the coming campaign, the WVZ expects a beet delivery of around 29 million t. The amount of sugar produced from this is estimated at around 4.4 million tonnes.
On 1 October, the Carbon Border Adjustment Mechanism (CBAM) will enter into application in its transitional phase. CBAM is the EU's landmark tool to fight carbon leakage and one of the central pillars of the EU's ambitious Fit for 55 Agenda. It will equalise the price of carbon between domestic products and imports. This will ensure that the EU's climate policies are not undermined by production relocating to countries with less ambitious green standards or by the replacement of EU products by more carbon-intensive imports. CBAM is a WTO-compatible measure that encourages global industry to embrace greener and more sustainable technologies. In its transitional phase, CBAM will only apply to imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. EU importers of those goods will have to report on the volume of their imports and the greenhouse gas (GHG) emissions embedded during their production, but without paying any financial adjustment at this stage.
Europe's sugar beet growers are turning away from the crop in a move that could drive soaring prices even higher, as the EU's environmental rules clash with its bid to stem food inflation and secure supplies. Farmers are switching crops after the European Union's top court ruled in January they can no longer be granted exemptions to a ban on so-called neonics - insecticides which protect against diseases like virus yellows in sugar beet but are toxic to bees and other pollinators vital to food production.
Sidel has been appointed to install a highly flexible end-of-line turnkey solution for British Sugar, the leading producer of sugar for the British and Irish food and beverage markets. The holistic and tailor-made solution will support the British company, a subsidiary of Associated British Foods plc that works with 2,300 growers, to meet market requirements as well as retailer expectations.With increasing consumer demands and escalating sugar sales, British Sugar processes around 8 million tonnes of sugar beet to produce up to 1.2 million tonnes of sugar annually. The company required a large-scale operations replacement for its end-of-line system that was over 38 years old, including a brand-new solution with a high level of multiple SKU complexity management and automation.