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.
It's really easy (and anonymous) to subscrible to this EU and UK News & Views feed with RSS. Add this address to your favourite RSS reader:
From pastries to vegan hamburgers, from sports clothes to cosmetics, from antifreeze agents in vaccines to replacements for microplastics. With all its versatility, the sugar beet is a key component in innovative solutions for a sustainable future. In the Bright Beet Book, Cosun Beet Company presents more than 130 versatile applications showing how sugar beet can lead the way. It is also the world’s first book to be made from beet paper. The book was introduced to the world during an online talk show on 25 November 2021. An online version of the Bright Beet Book has been produced to accompany the physical book.
Regional sugar producers have made an urgent appeal for policy changes to protect their markets in CARICOM in order to boost production. The appeal on November 11 was made by Chairman of the Sugar Association of the Caribbean (SAC) R. Karl James in a press release and came in the backdrop of the fact that more than two-thirds of sugar consumed in CARICOM comes from duty-free extra-regional sources. This displaces market opportunity for CARICOM sugar which is then forced onto the low value global market. James noted that the production levels for SAC members: Jamaica, Barbados, Guyana, and Belize, have fallen short of those in previous years. He noted that if CARICOM governments took the necessary steps to protect local producers from extra-regional imports, then production would improve in 2022.
Low carryover stocks from the previous season, which has tightened the sugar market in the past months, continue to support spot prices despite the harvest progresses and the availability of the new crop. This is also being reflected in the prices in the deficit markets in Southern Europe. Mediterranean Europe prices increased by Eur26/mt on the week to be assessed at Eur609/mt on Nov. 5, crossing the Eur600/mt mark for the first time since April 2017, Platts data showed. In this context, S&P Global Platts Analytics expects domestic prices to remain at a high level in the coming months, considering that the market remains tight. The low sugar content means that this season's production won't be as high as originally expected. Moreover, with world prices also at high levels, this will give extra support to domestic values as it will keep the import parity above them.
FAO’s preliminary forecasts for the global sugar market in 2021/22 (October/September) points to a likely second consecutive season of a tight supply-demand balance. Although world production is forecast to rebound after three years of decline, it is nevertheless expected to fall short of global consumption. As a result, global sugar inventories are anticipated to decline in 2021/22. The forecast for world sugar production in 2021/22 stands at 173.7 million tonnes, up 2.2 percent from the reduced level in 2020/21. The upturn is largely based on expectations of production recoveries in the European Union, the Russian Federation and Thailand. Prospects are also favourable in India, while in Brazil, the world’s largest producer, output is forecast to decline for the second consecutive season in 2021/22. Global sugar consumption is set to rebound for a second successive season in 2021/22, growing by 1.9 percent following the COVID-19-related contraction in 2019/20. The foreseen increase is underpinned by the rapid growth prospects for the global economy. Two countries, in particular, are expected to drive up global sugar consumption, India – the world’s largest sugar consumer – and China. Growth is also foreseen across Africa and South America.
In a recent report, the Institut Montaigne underlines that Europe cannot continue to drive the evolution of the vehicle fleet based solely on the measurement of CO2 emissions from the exhaust pipe. The French bioethanol industry is asking France and the European Union to change European regulations in order to adopt a system based on a complete life cycle analysis.
AB Sugar delivered another year of strong trading performance with big improvements in adjusted operating profit, profit margin and return on average capital employed. Revenue was 8% ahead of last year at constant currency with higher domestic and regional volumes for Illovo as well as higher prices in Europe and Africa. The commercial performance in Illovo, together with continued savings from our cost improvement and efficiency programmes, resulted in a 75% increase in adjusted operating profit to £152m.
Benefiting from the summer weather, the current sugar beet harvest in France is estimated at 34.1 Mt, up 30.0% compared to 2020, but 8.0% lower than the 2016-2020 average (37 Mt). Yields are significantly higher than 2020 (+ 36.1%) and above the average for the 2016-2020 harvests. The areas, estimated at 402,000 ha, fell for the third consecutive year and are down 10.4% compared to the five-year average, losing 46.9 thousand hectares. Note that Agreste area estimates include sugar beet used to make "jus vert" and hence bioethanol.
After a late start of sowing, weather conditions and rainfall have been good for the main sugar producers over the summer for the crop 21/22, however sugar content remained disappointing low for quite some time. Lately the sunshine in September and October helped to improve. We have nudged our total production estimate for the EU27 block + UK higher to 17.25 mill. Mt (some 600 kto estimate for Isoglucose to be added. According to our projections for the coming season, Europe/UK will need to import in the same order magnitude. It is obvious that in a market which is a structured net importer the price levels should be trading closer / at import parity level going forward. The spot markets have meanwhile already reflected this and are trading at levels between 550 €/to in the beet belt and above 600 €/to in deficit areas.
The Australian trade minister has flown home without clinching a trade deal with Britain. Dan Tehan had travelled to London in hope of signing an agreement with his opposite number, Anne-Marie Trevelyan, but the two sides have kicked the plan into the long grass. “I know we’re all impatient to get that signature on the final inked deal,” Tehan told the U.K.-Australia Chamber of Commerce on Friday, the morning after his meeting with Trevelyan. “I can tell you no one is more impatient than me to get that done. But we do have to make sure that we get it right.”
The Sugar segment’s revenue in the first half of 2021|22 was up slightly from one year earlier. This positive development was driven primarily by an increase in sugar selling prices. In the 2020 sugar campaign, AGRANA’s own production was below average due to insect pests, especially in Austria. The resulting higher volumes of sugar reselling and refining, with associated lower margins, were a key driver of the reduced Sugar EBIT performance in the first six months of 2021|22.
The EU agri-food sector is confronted with the surge of commodity prices – notably due to the recovery of the EU, US and Chinese economies. The increase of energy and transport prices and the consequences of the spread of the COVID-19 Delta variant, in particular in Asia, are having a disruptive impact on supply chains across the globe. Regarding sugar beet, the forecast for 2021/22 is more favourable than last season, with a yield forecast of 75.1 tonnes per hectare. EU sugar beet production could reach 113 million tonnes, an increase of 13.6% compared to the previous season.
Sugar segment’s revenues rose significantly to EUR 1,231 (previous year: 1,113) million. The improvement was driven mainly by higher sugar sales revenues since the beginning of the new 2020/21 sugar marketing year and, since the second quarter of 2021/22, also by higher sales volumes. The first quarter of the 2020/21 financial year initially benefited from the positive effects of hording in retail at the start of the coronavirus pandemic. In the course of the last fiscal year, these benefits were clearly over-shadowed by weaker demand from the sugar processing industry. While the operating loss in the first quarter of fiscal 2021/22 was still significantly higher than in the previous year, the sugar segment was able to return to positive results in the second quarter. Therefore, the cumulative operating result also improved significantly to EUR -18 (previous year: -58) million. Higher sugar sales revenues continued to be offset in particular by raw material price-related higher production costs from the 2020 campaign, but also by increased costs for packaging materials. Since the second quarter, the increase in sales volumes has also had a positive effect.
Fire crews are dealing with a blaze at the British Sugar factory in Newark. Crews from Newark, Collingham and Southwell are currently in attendance. No injuries have been reported and the fire is believed to be under control.
By allowing the beet and sugar inter-profession to publish market indicators, the Besson-Moreau Law offers the sector the opportunity to build contracts that allow a better distribution of value from producer to consumer in a more market dynamics to regain income over the long term. For the president of the CGB, Franck Sander: "This law is the opportunity to change the contractualization of our entire sector on the basis of market indicators shared by all to rebalance the balance of power between sellers and buyers. of sugar and thus regain value. This is an important step of progress for our sector even if it does not avoid the need to deepen the reflection around the futures markets and counter-cyclical tools such as the Income Stabilization Instrument."
Sugar beet harvesting is kicking off with promising yields for one Suffolk farmer amid more optimism among growers due to low disease levels and a price rise in the pipeline. James Forrest has had to cope with two previous very wet autumns when lifting sugar beet on his heavy land, but harvesting progress this season has been a lot easier. His early beet lifts are showing yields of 70-80t/ha, in line with what he would expect from early-harvested crops, and coming out of the ground well after recent rain. “This season’s beet looks a better crop with more potential than last year, and we are hoping to get autumn cereals in after lifting the beet,” he tells Farmers Weekly.
The Wirtschaftliche Vereinigung Zucker (WVZ) today published its second harvest and production estimate for 2021. Accordingly, sugar beet is grown in Germany on a cultivation area of around 354,000 ha. The estimated sugar beet yield is 80.1 t/ha. For the upcoming campaign, the WVZ expects a beet delivery of around 28.4 million tonnes. The amount of sugar produced from this is estimated at around 4.5 million tonnes.
British Sugar’s Agriculture Director Peter Watson commented, “Today’s announcement is excellent news for the British beet sugar industry, and we look forward to considering the next steps in progressing our plans to use gene editing as one of our tools to protect the sugar beet crop in the future. We will review the details in the Government’s response closely, as we look to further our cross-industry research in this area.”
Start of the campaign at the Jülich plant After about 2200 t of beets had already reached the Jülich plant on Saturday to "warm up" the factory, the first scheduled beets rolled onto the scales punctually at 6 a.m. on Monday. From now on, everything in Jülich will revolve around beets and beet sugar again until the new year. The beets processed in the first two days have an average sugar content of over 16.5% pole. on. And the trend is rising. The rainfall of the last few months has ensured a well-developed beet body, so that good beet yields can be expected across the entire growing area for this campaign.
The European Union is likely to challenge on legal grounds any move by the UK to trigger Article 16 of the Northern Ireland Protocol, RTÉ News understands. Furthermore, the EU could resort to raising tariffs on UK products in retaliation, which officials say is provided for under the EU-UK free trade agreement. Although the UK government has repeatedly threatened to trigger Article 16, saying the conditions have already been met, the European Commission does not believe that to be the case, and would challenge any triggering of the article on legal grounds.
Farmers have triumphed in a long and bitter row over sugar beet prices — after clinching a far better deal for the crop next year as commodity prices soar. Growers will see a significant 33% jump in prices in 2022 after the National Farmers’ Union (NFU) and British Sugar reached agreement on a one-year contract from 2022. But it appears a much sweeter £27/tonne deal for next year’s beet harvest compared to £20.30/t this year won’t entice all growers. Two years of hellish conditions in the fields in 2019 and 2020 haven’t helped. A number dropped the crop completely from their rotations last year after reaching the end of their tether over a number of issues — from disease and soil damage to logistical problems and low prices.
NFU Sugar and British Sugar have today announced a one-year sugar beet contract from 2022, including the continuation of the Virus Yellows assurance scheme and the futures-linked contract. The one-year contract for 2022 will pay a fixed price of £27 per adjusted tonne. Current multi-year contracted growers will have the option to upgrade to a fixed £25 per adjusted tonne by contracting for an additional contract year. There will be no separate market-linked bonus. These prices are on a zero-crown tare basis, meaning growers are paid for the entire roots of beet they deliver. In addition, NFU Sugar and British Sugar have agreed to continue the innovative futures-linked variable priced contract, giving growers the ability to make their own pricing decisions for a portion of their contract. This will now be open to all growers, who will have the option to allocate up to 10% of their tonnage onto this contract. Also new for this year is a local premium for all growers up to 28 miles contract distance from their nearest factory.
In Europe, the spot sugar market is following the recovery in global sugar prices. In a context of European stocks at a historically low level, we are approaching 500 € / t at the French factory. There is little reason for this to change for the season which will begin, when the areas to be harvested are at their lowest since the end of quotas. Yet despite soaring prices, sugar beet growers are slow to reap the benefits of this development. "When sugar is sold in Europe, these are often fixed-price, long-term contracts unrelated to the world price," explains Timothé Masson, CGB's director of economics. According to him, there is a deficit of European market indicators allowing the establishment of indexed contracts, as we can know in wheat, corn or rapeseed. “When the market is depressed, buyers tear up the contract, but it is difficult for suppliers to complain even if it is illegal. On the other hand, when the market goes up, it is impossible for the supplier to review the contract with his client”, he said. For him, it is urgent to establish a "reliable sugar price indicator which constitutes a recognized benchmark". This is precisely what the law adopted by LREM deputy for Aube, Grégory Besson-Moreau, aims to implement, aimed at improving farmers' income. Passed unanimously in the National Assembly in June, it is now being considered in the Senate. This text, commonly called EGalim 2, complements the 2018 Food Law.
The outlook for sugar beet in France has been influenced by contrasting factors, with high green biomass development, but also high pressure from pests and diseases and below-average radiation in the main producing regions (which tends to negatively affect sugar content). In Germany, after a very cold start to the season with below-average biomass accumulation, sugar beet has recovered and the yield is forecast to be above last year’s level. So far, reported sugar content is still lower than usual, as there were not many days with high sunshine duration. Also in Poland, after a very cold start to the season, sugar beet has regained biomass accumulation, and overall yields are now expected to be above last year’s level. However, yield expectations vary across regions, and reported sugar content is still below average.
Sugar beet growers may have to rely on their own tractors and trailers to transport their crop to the factory this campaign because of a national shortage of HGV drivers. NFU Sugar and British Sugar issued the stark warning to growers as this year’s sugar beet lifting campaign got under way with the opening of the Bury St Edmunds processing factory on 16 September.
At the start of its sugar factories, Tereos looks back on the highlights of this 2021/22 beet campaign , including “the late episodes of cold and frost which impacted 17,000 ha of cultivation in the Centre, Val de Loire and Grand-Est ". “The ups and downs that have hit this season will lead to a drop in available volumes, which should nevertheless be higher than last year", said Olivier Leducq, director of Tereos Sucre Europe. "At the start of this new campaign, we are continuing our efforts to make the best use of the beet production of our cooperators by exploiting our industrial system which allows the sugar-alcohol mix to be adapted to fluctuations in demand on our various markets".
In the second quarter of current fiscal year 2021/22 (1 June to 31 August 2021), Südzucker AG according to preliminary increased consolidated group revenues about 10 percent to about EUR 1.84 (previous year: 1.68) billion. The consolidated group operating result rose by about 25 percent to about EUR 85 (previous year: 68) million. The significant improvement in group operating result is mainly driven by segment sugar with a positive earnings contribution of about EUR 7 (previous year: -42) million.
Sugar cane, which is primarily used as a food additive, is exchanged in relatively higher volumes than the other crops considered, and also appears to be highly at risk due to climate change (Figure 14). Both exposure to risk and opportunities for growth are concentrated in the Global South, with Brazil, Thailand, India, Cuba, and China – all major sugar cane growers – likely to introduce significant risk to the global sugar cane market in a warming world. In contrast, both Argentina and South Africa appear well-placed to make up a degree of this shortfall, with Argentina in particular already producing high quantities of sugar cane.
The world sugar market, which is driving the European market, is in good shape. But that might not last. To consolidate the sector, the futures market could be a good to use, explains Timothé Masson, market expert at the CGB.