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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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.
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.
Finally having had the opportunity to travel again and visit the team of Südzucker Hellas: It is one thing to read EU statistics and SAP reports on low stock levels. However, it is really shocking to see a real almost empty warehouses in Greece that is usually still filled... Looking very much forward to the next campaign and receiving replenishment.
AB Sugar had a strong fourth quarter and revenue for the full year is expected to be 7% ahead of last year. This growth was driven by particularly strong domestic and regional volumes for Illovo as well as by higher prices in Europe and Africa. Adjusted operating profit will be ahead of expectation and substantially ahead of last year. All businesses continued to deliver savings from the ongoing performance improvement programme. We expect demand in the European market to be in excess of production again this coming year.
UK chosen to lead new WHO Sugar and Calorie Reduction Network after progress with its domestic sugar-reduction programme. Over 50 countries encouraged to sign up to network, set to launch in spring 2022 Network will address rising rates of global obesity by cutting sugar and calories in food and drink products The UK has been chosen by the World Health Organization (WHO) to lead a new Sugar and Calorie Reduction Network to take global action on sugar and calorie reduction. Speaking at the WHO Regional Committee for Europe today (Monday 13 September), the Chief Medical Officer, Professor Chris Whitty announced the formation of the network, which will work with countries across Europe to reduce sugar and calorie intake. The WHO’s EU region covers around 50 countries, with a much wider reach than the European Commission’s remit.
British traders paid an additional £600m in customs duties over the first half of 2021 due to complications arising from the rules of origin in the UK’s trade agreement with the EU – a deal which nominally removed tariffs for all goods. The complexity of the rules was highlighted in January by Marks and Spencer when it said imports of its much-loved Percy Pig sweets from Germany faced tariffs when being re-exported into the Republic of Ireland. According to the Guardian, analysis of HMRC data showed that businesses paid £2.2bn in customs duties compared with £1.6bn in the same six-month period last year. Around 2,000 food products were affected by rules of origin.
Nordzucker will start processing this year's sugar beet on 10 September. An average harvest is expected across the Group. After rapid sowing in April, there was far too little rain in some of the Nordzucker Group's growing regions during the early summer. It was not until July that the onset of precipitation in almost all countries led to an easing of the situation and significant growth in beet. With slightly lower sugar contents than in previous years, Nordzucker expects an average harvest. Last year the Group produced about 2.7 million tonnes of sugar.
2020 marked another improvement in the EU's leading position among the world's biggest exporters of agri-food products. On the import side, the EU has become the third largest importer after the United States and China, according to a report published today. 2020 was an exceptionally challenging, yet successful year for EU agri-food trade, which reached a total value of €306 billion: €184 billion in exports and €122 billion in imports. Both values represent a slight growth of 1.4% and 0.5% respectively, compared to 2019. International trade has played a crucial role in mitigating the devastating economic impact of the COVID-19 pandemic and proved to be a central tool in enhancing resilience. The EU is the largest trading bloc and a wide-ranging network of free trade agreements (FTAs) underpins its position in world trade.
Every four of five years or so, the EU sugar market changes quite fundamentally – political reasons aren’t always the cause – market factors may also give rise to fundamental change as opposed to short term market volatility. Is market is changing again, four years after the last big change in 2017 (the end of quotas)? Politics are a cause – the Green New Deal, Farm 2 Fork, etc. – but also the markets seem to be turning in quite a fundamental way, including the freight and ethanol markets, not to mention the HGV driver shortage, and it will be really interesting to see what areas EU+UK sugar beet farmers will plant next year. I’d also note that we’re entering a new phase for the market with very low stocks. Meanwhile, we’ve seen limited EU buying from ACP countries when prices were cheap – now they’re getting expensive! I’m not quite sure where we’re heading yet – we don’t have the blueprint of a European Commission proposal as we used to – but I think we are changing direction!
BRUSSELS, 8 September 2021 – European renewable ethanol association (ePURE) members produced 5.57 billion litres of ethanol and 6.16 million tonnes of co-products in 2020, according to audited data released today by the industry group. The figures showed a significant increase in production of ethanol for industrial use, including for hand sanitisers and disinfectants. The new statistics confirm the importance of European renewable ethanol biorefineries to achieving EU Green Deal objectives by reducing transport emissions and ensuring sustainable domestic production of animal feed and other beneficial co-products, including captured CO2. More than 98% of the feedstock used to produce renewable ethanol by ePURE members – including cereals, sugars, wastes and residues – was grown or sourced in Europe.
HAMBURG, Sept 6 (Reuters) - Germany's refined sugar production from beets in the new 2021/22 season now starting is forecast to rise to some 4.38 million tonnes from 4.10 million tonnes last season, Germany's sugar industry association WVZ said in its first harvest forecast. German farmers have planted around 354,000 hectares of sugar beet for the new crop, up from about 350,000 hectares last season, the association said. In the new 2021/22 season, 27.56 million tonnes of beets are expected to be delivered to sugar factories for processing, up from 25.72 million tonnes last season. Average beet crop yields are estimated at 77.8 tonnes per hectare, up from 73.3 tonnes last season. Average beet sugar content this season is estimated at 18%, up slightly from 17.9% last season.