News and views

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11/10/2024

gov.uk

UK ATQ quota for raw sugar to be maintained at 260,000 tonnes in 2025, but there will be another review for 2026 - gov.uk

The previous government implemented an Autonomous Tariff Quota (ATQ) on raw cane sugar on 1 January 2021 following the UK’s departure from the EU. Following subsequent reviews of this ATQ in 2021 and 2023, the previous government maintained the volume level of this ATQ at 260,000 tonnes and committed to reviewing this again in 2024. On the basis of the review carried out in 2024, the government has decided to maintain the raw cane sugar ATQ for 2025 at the existing volume of 260,000 tonnes and maintain the UK Global Tariff (UKGT) rate at the same level (£280 per tonne for raw cane sugar for refining) to minimise disruption to the sugar market in the short term and balance other concerns. The government will make an announcement in due course on the process for determining the ATQ and related considerations for 2026 and subsequent years.

10/10/2024

Bloomberg

Europe’s Sugar Companies See Profits Tank on Strong Supplies

Europe’s sugar companies are facing revenue pressures, after last year’s stellar performance, as increased supplies are pushing down prices and hurting their bottom line.

20/9/2024

National Association of Sugar Producers of Ukraine

Ukraine exported more than 691 thousand tonnes of sugar

According to the results of the 23/24 marketing year (September 2023-August 2024), Ukraine exported 691.8 thousand tonnes of sugar, of which 77% came to EU countries, 23% — to the global market. The main importers of Ukrainian sugar among the EU countries are Italy, whose share in Ukrainian sugar export to the EU reached 19%, Bulgaria (18%) and Hungary (14%). The main export destinations outside the EU are Cameroon (17% of the global market export), Libya (15%) and Turkey (11%).

5/9/2024

Associated British Foods

ABF Sugar performance "mixed" - ABF trading update for Q2 2024

The performance of the ABF Sugar business has been mixed, according to an update on trading during the second half of the financial year which will end 14 September 2024. "Overall, we expect Sugar to deliver adjusted operating profit of approximately £200m, which is still strongly ahead of last year but, due to a reduction in European sugar pricing, lower than previously anticipated. Europe was challenging overall in H2. Production levels have been strong, benefiting from the return to a more typical sugar beet crop in the UK. However, we have seen sharper than expected falls in UK and European sugar pricing due to increased supply in the market. As a result, both of our European Sugar businesses have experienced a negative impact to sales and profitability in Q4. On a constant currency basis, our overall African sugar business has grown well in H2. We have had a strong performance in Zambia and South Africa, whereas in Malawi and Tanzania, high rainfall has impacted sugar cane yields and production this year. In Tanzania, this has led to unexpectedly high volumes of sugar imports and lower prices. On an actual currency basis, our African sales are expected to decline in H2 due to the impact of foreign exchange translation. The operational performance of Vivergo, our bioethanol plant in the UK, has continued to strengthen in H2 albeit the margin has continued to be mixed during the period.

3/9/2024

Competition and Markets Authority

UK CMA clears T&L Sugars deal to buy Tereos UK & Ireland’s retail sugar business

The Competition and Markets Authority (CMA) has today cleared T&L Sugars Limited’s (TLS’) deal to buy Tereos UK & Ireland’s retail sugar business, following an in-depth Phase 2 investigation led by an independent inquiry group. The clearance comes after the inquiry group explored concerns that the deal could reduce competition in the UK. Only three businesses (including TLS and Tereos’ UK retail business) supply the large majority of sugar to customers such as supermarkets and restaurants. However, having conducted a thorough investigation, the inquiry group found that, without the deal going ahead, the most likely outcome would be that Tereos’ UK retail business would close. Since closure would also result in a loss of competition absent the merger, and the evidence showed that there was no other alternative and less anti-competitive purchaser for the business besides TLS, the group has decided to clear the deal. Richard Feasey, Chair of the independent inquiry group carrying out the Phase 2 investigation, said: "Having reviewed a wide range of evidence – including detailed financial information on Tereos’ UK retail business and the efforts they have taken to try and improve its performance – we believe that the right outcome is to clear this deal"

3/9/2024

Temoignages (Réunion)

La Réunion Island: Farmers’ income at the heart of the crisis in the cane-sugar-alcohol-energy sector

For over 20 years, the industrialist who buys all the sugarcane harvested by farmers has paid a price that has not changed. Public subsidies from the French State and the European Union compensate for the rise in production costs, not the buyer. In these conditions, it’s hardly surprising that the area planted with sugar cane and the number of farmers are falling. The creation of new, more productive varieties should not obscure the essential point: farmers must make a decent living from their work by selling their produce at a fair price.

2/9/2024

NFU Sugar

NFU Sugar commercial and market insight manager Arthur Marshall compares growers’ options following the agreement of the 2025/26 beet contract with British Sugar

The futures-linked contract has much more potential to increase in value, should the market rise, than the market-linked bonus. However, the downside on the futures-linked contract is unlimited whereas the market-linked bonus contract has a minimum price. Estimates of the world market surplus for 2025 continue to grow. The 2025/26 beet contract agreed between NFU Sugar and British Sugar requires growers to place at least 30% of their 2025 contract tonnage on one or both of the market related contract options. The maximum proportion of contract tonnage that can be put on the £33/t fixed price contract is 70%, but it is possible to put a smaller proportion on the fixed price contract and more than 30% across the other choices. As a guideline, Globaldata’s latest European sugar market report assesses European sugar prices as being contracted around €480-€525/t for 2024/25, depending on location and size of buyer, whereas earlier in the summer sale prices were being assessed around €570/t – more or less equal to the trigger level on the 2025 MLB contract.

2/9/2024

Wirtschaftliche Vereinigung Zucker

German sugar production expected to rise by 13% -- WVZ

Germany's sugar production in 2024/25 is forecast to rise to 4,775,730 tonnes, up about 13% year on year, the WVZ sugar association reported in its first harvest forecast. The area sown increased by 5.7% to 385,000 hectares, WVZ said.

21/8/2024

julianprice.com

Retail sugar price inflation falls to negative 5.1% from -4.7% last month (EU and UK weighted average) but remains stubbornly high in the United Kingdom

Retail sugar price inflation in July 2024 fell to negative 4.6% year-on-year in Region 1, negative 0.6% y-o-y in Region 2 and negative 9.0% y-o-y in Region 3 (averages weighted by sugar consumption), according to data released by Eurostat on 20 August. The fall in retail sugar prices was particularly pronounced in Poland (-23.7%), the Baltic States (-16.0%) and South East Europe (-12.3%). However, according to these and ONS data released on 14 August, retail sugar price inflation in the United Kingdom and Ireland remained stubbornly high at positive 7.0% y-o-y in July 2024, a shade less +7.4% recorded in June. Retail prices for confectionery products was +4.7% in July 2024, and for soft drinks retail prices rose +3.7% on average in the EU and UK.

7/8/2024

Euractiv

EU-Mercosur to meet in September signaling movement in trade talks

European Union and South American negotiators will meet on 4-6 September in Brasilia in the first in-person talks since April, raising hopes an EU-Mercosur trade deal can be concluded this year, diplomats said. In the works for two decades, an agreement has been delayed by European concerns over environmental safeguards and complaints by the Mercosur trade bloc that those questions are motivated by protectionism. “We are traveling to Brasilia for an in-person round of negotiations 4-6 September,” a European diplomat said. “The end-of-year timetable for conclusion is realistic,” he said.

6/8/2024

gov.uk

UK Competition and Markets Authority provisionally clears T&L Sugars purchase of Tereos UK

The provisional decision – taken by an independent CMA panel – comes after a Phase 2 review revealed that Tereos’ UK retail operation could close. T&L Sugars Limited (TLS) announced their deal to buy Tereos UK & Ireland’s retail sugar business from Tereos SCA (Tereos) in November 2023. The business supplies supermarkets, wholesalers and foodservice customers in the UK.

2/8/2024

ED&F Man

Hartree announces deal to acquire ED&F Man Commodities

Hartree Partners, LP (“Hartree”), a global energy and commodities trading company, today announced that it has acquired the majority of ED&F Man’s outstanding A2 and B1 Senior Secured Legacy Debt and entered into an exclusive agreement in respect of the acquisition of ED&F Man Commodities’ three business units Volcafe (coffee), ED&F Man Liquid Products (molasses, animal feeds and fish oil) and ED&F Man Sugar. ED&F Man is one of the world’s leading providers of soft commodities and logistics. The transaction is expected to close in 2025, subject to the receipt of required regulatory approvals and other closing conditions. In conjunction with the transaction, ED&F Man Commodities’ lenders are amending and extending ED&F Man Commodities’ three current cross-commodity facilities until March 31, 2026.

1/8/2024

European Commission

European Commission clears Bunge's acquisition of Viterra subject to conditions

The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Viterra Limited (‘Viterra') by Bunge Global S.A. (‘Bunge'). The approval is conditional upon full compliance with the commitments offered by the parties. Bunge and Viterra are both vertically integrated global agribusinesses, active in the origination, trading and processing of agricultural products, with significant overlaps in the sector of oilseeds (i.e., rapeseed, soybean and sunflower seed).

29/7/2024

NFU Sugar

British Sugar and NFU Sugar agree contract for 2025/26 sugar beet crop

Both NFU Sugar and British Sugar said they ‘recognise the importance of choice and flexibility’, and are pleased to offer growers the following options: A one-year fixed price contract at £33.00/t, for up to 70% of your contract. A one-year contract with a guaranteed base price of £30.70/t plus an improved market-linked bonus. A futures-linked contract, for up to 50% of your contract. Growers can choose to split their tonnage between any of these contract options. An enhanced yield protection option is available for a reduced contract price of £32 for the fixed price option or £29.30 for the market-linked bonus and futures options. A cash advance, late delivery allowance and frost insurance are also being offered, in line with previous years. However, given the challenging conditions in the sugar market, local premiums will not be paid in 2025/26. Significant enhancement to this year’s contract is the relaxed performance rules for one year only, ensuring growers retain their CTE (Contract Tonnage Entitlement) in 2026 if they deliver at least 70% of their contracted tonnage in 2025/26.

25/7/2024

Romania Insider

Austrian Agrana closes sugar refining line at one of its Romanian factories

Austrian company Agrana, the largest sugar producer in Romania, has announced an indefinite suspension of the sugar refining line at its Buzău factory due to supply chain disruptions causing significant economic impact. Despite this halt, other operations at the Buzău and Roman factories, including packaging, storage, and logistics, continue as usual. The decision to stop refining affects some of the factory's employees, with Agrana ensuring compliance with all legal requirements in its dealings with the union. Last week, the union was officially notified about the indefinite suspension and the initiation of preservation measures for the dedicated refining line to prevent equipment degradation and allow for future reuse if necessary.

23/7/2024

Agro Infomacion (Spain)

Sugar beet farmers in Seville and Cadiz desperate over delays in harvesting their crops

COAG de Andalucía has raised the alarm regarding the calamitous situation experienced by sugar beet farmers in the area of Bajo Guadalquivir, Guadalete and Barbate (mainly Seville and Cadiz) who are seeing how the sugar factory is not harvesting their crops due, fundamentally, to a deficit in the planning of the campaign, which, added to the deterioration of its facilities, is resulting in hundreds of hectares remaining in the fields awaiting harvesting. The consequences of this delay, "unacceptable for farmers, in the harvest are far-reaching because, on the one hand, it means an extra cost in the available irrigation supplies, which is totally unacceptable if we take into account the period of drought we are going through and the fact that the start of other crops (such as vegetables) are in turn in need of these allocations from today." In this sense, the slow pace of harvesting is causing beet farmers to be at risk of rotting in some areas, which in turn affects the costs of production for the campaign, "leading the producer to unsustainable losses, squandering their initial calculations and the agreements signed at the beginning of the season." While in other areas, it is implying an extra cost in the provision of irrigation water.

17/7/2024

European Commission

The EU agri-food chain Observatory starts working to restore trust and improve transparency in the food chain

The EU agri-food chain Observatory (AFCO) held its first meeting on Wednesday 17 July. Its objective is to better understand the functioning of the supply chain and bring increased transparency on prices, structure of costs and distribution of margins and added value, while respecting confidentiality and competition rules. The launch of this Observatory was first announced in March 2024 as one of the measures to strengthen the position of farmers in the food supply chain and reinforce the trust between all actors throughout the chain.

11/7/2024

Caobisco

Caobisco sets out 2024/2029 confectionery sector manifesto

The chocolate, biscuit and confectionery industry association, Caobisco, has published a "manifesto" for the 2024/29 EU policy cycle. The manifesto highlights the critical role Caobisco industries play in the European economy, from supporting local supply chains to driving innovation and maintaining high standards of quality. The manifesto states that Caobisco industries are committed to upholding the values of sustainability, fair trade, and responsible production while ensuring that our products remain beloved staples in households worldwide. The document advocates policies that foster open strategic autonomy, fair competition, and the development of sustainable supply chains to build a resilient and prosperous future for the European chocolate, biscuit, and confectionery industry. Caobisco has also joined a coalition of 31 leading European business associations to call for an "ambitious and open trade policy to support the EU’s competitiveness and economic prosperity". In a Joint Declaration, they highlight the importance of trade openness in driving economic growth, creating jobs, and enhancing resilience in the face of global challenges.

8/7/2024

Bloomberg

Another Green Bubble Is Deflating in Biofuels

After the stock market debacle for wind companies in 2023, the biofuel sector is the next deflating green bubble. The industry is battling several problems: significant cost overruns and engineering shortcomings, and a glut of biofuels as rosy forecasts for demand never materialized. Oil consumption, instead, is rising. Biofuel margins have tumbled. Neste is paradigmatic: Its market value has plunged more than 75% to about $15 billion. Green Plains Inc., one of the largest US ethanol makers, has seen its shares halve over the last year1. Others have fared worse: Several companies have either filed for bankruptcy or are teetering on the verge of collapse. Fulcrum BioEnergy Inc., an American company that raised $1 billion in funding — from BP Plc, among others — with the promise to turn waste into green jet fuel has effectively stopped operating.

8/7/2024

Office for Environmental Protection (UK)

OEP launches investigation into Defra’s emergency authorisation of pesticides

The Office for Environmental Protection (OEP) has launched an investigation into Defra’s emergency authorisation of a neonicotinoid pesticide in 2023 and 2024. The investigation is seeking to determine whether there were serious failures to comply with a number of environmental laws in relation to emergency authorisations granted for the use of Cruiser SB on sugar beet seeds. In particular, the investigation is considering Defra’s interpretation and application of the precautionary principle and compliance with its nature conservation obligations when it considers granting emergency authorisations. This is an investigation into a complaint submitted to the OEP by ClientEarth.

4/7/2024

Table.Media

Anti-deforestation: Why the Commission is under pressure

From 2025, according to EU regulation, companies will have to prove that their products do not contribute to deforestation. However, some important foundations for implementation are still missing. "The Commission's work on the benchmarking is still incomplete," a spokesperson told Table.Briefings. It will take the necessary time to ensure that the assessment is "based on a scientifically and professionally sound methodology." As soon as the preliminary results are available, the Commission will enter into a dialog with the countries that have been classified (in whole or in part) as particularly high-risk.

2/7/2024

OECD - FAO

Global sugar consumption is expected to grow further and production to expand 14% between 2024 and 2033 - OECD-FAO

Emerging economies will continue driving agricultural markets over the coming decade but with regional shifts projected - OECD-FAO Agricultural Outlook 2024-2033. Global sugar consumption growth is anticipated to double over the next ten years compared to the previous decade, mainly as a result of the faster economic growth projected in low- and middle-income countries across Asia and Africa. Per capita sugar consumption in these regions, is still expected to stay considerably below the level in high-income countries, as the consumption gap is only slightly narrowing. Sugar production is expected to expand over the Outlook period by 14%. Sugarcane is projected to account for more than 85% of the total sugar crop output, with Brazil consolidating its position as the largest producer of sugarcane. Investment in Brazil has been steadily increasing in recent years and expansion mainly in area and yield is expected to rise over the next decade. Productivity gains, including varietal improvements and higher extraction rates, will drive sugar production growth in India and Thailand, with acreage projected to remain relatively fixed.

27/6/2024

Südzucker AG

Major Ingredient Players Unite to Support Sustainable Farming

Raffinerie Tirlemontoise, BENEO and Puratos collaborate with Belgian farmers to launch joint Climate Farming Project Raffinerie Tirlemontoise, a beet sugar producer and part of Südzucker Sugar Division, BENEO, a leading manufacturer of functional ingredients, and Puratos, a global leader in bakery, patisserie, and chocolate ingredients, have joined forces to launch a pioneering Climate Farming Project. The ambitious initiative supports Belgian farmers in implementing more sustainable farming practices and promotes regenerative agricultural principles that contribute to enhancing soil health and reducing environmental impact.

27/6/2024

trace.earth

EU27 countries in the spotlight for deforestation exposure

EU imports of agricultural commodities continue to drive substantial global deforestation with cocoa and oil palm being the main culprits, new Trase research shows. Our analysis reveals striking differences between countries in deforestation exposure and the products responsible as they prepare to implement the regulation on deforestation-free products (EUDR). From 30 December 2024, EU member states will implement the regulation on deforestation-free products (EUDR), which will require companies to provide evidence that imports of several forest-risk commodities were not produced on recently deforested land. Trase was commissioned by civil society group Fern to assess the deforestation exposure of each EU member state and create a summary factsheet for each that highlights its exposure to deforestation from imports of products included in the EUDR. Between 2019 and 2021, the EU was exposed to 190,500 hectares (ha) of deforestation on average every year from its direct imports – an area more than ten times the size of Brussels. Over this period, EU imports were associated with 15.0% of the global deforestation linked to direct trade. The top countries of origin for EU exposure were Côte d’Ivoire (19.9%), Brazil (16.0%), Indonesia (11.6%), Ghana (8.7%) and Malaysia (4.7%), which together account for 61% of the EU’s total deforestation exposure.EU imports of agricultural commodities continue to drive substantial global deforestation with cocoa and oil palm being the main culprits, new Trase research shows. Our analysis reveals striking differences between countries in deforestation exposure and the products responsible as they prepare to implement the regulation on deforestation-free products (EUDR). From 30 December 2024, EU member states will implement the regulation on deforestation-free products (EUDR), which will require companies to provide evidence that imports of several forest-risk commodities were not produced on recently deforested land. Trase was commissioned by civil society group Fern to assess the deforestation exposure of each EU member state and create a summary factsheet for each that highlights its exposure to deforestation from imports of products included in the EUDR. Between 2019 and 2021, the EU was exposed to 190,500 hectares (ha) of deforestation on average every year from its direct imports – an area more than ten times the size of Brussels. Over this period, EU imports were associated with 15.0% of the global deforestation linked to direct trade. The top countries of origin for EU exposure were Côte d’Ivoire (19.9%), Brazil (16.0%), Indonesia (11.6%), Ghana (8.7%) and Malaysia (4.7%), which together account for 61% of the EU’s total deforestation exposure.

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