Tereos CEO Olivier Leducq outlines concerns about the EU sugar markets

Thursday, March 7, 2024
Mr Leducq posted on LinkedIn as follows: Why must the price of sugar remain at high levels in Europe if we want to ensure a sustainable future for our crops, our farmers and our industry? At the 8th edition of the Dubai Sugar Conference, which has just ended, I wanted to answer this essential question and share Tereos' vision of the major challenges that the sugar beet industry is facing. The very modest increase of 2 to 3% in the areas sown for the next campaign, despite the record sugar prices observed in Europe in recent months, illustrates the fragility of farmers who have completely reassessed the 'risk-reward' of growing beet. And there are several reasons for this: ➡ Growers are facing very high cost inflation: fertilizers, machinery, labour – the cost of growing beet increased by >35% in 2 years. ➡ Yield prospects have become unpredictable in the face of climate change and the extreme weather conditions we have seen recently, which will become increasingly frequent. ➡ Climate change is also causing an increase in the spread of diseases affecting beet, which, combined with increasingly restrictive European regulations, means that crops can no longer be protected as effectively. ➡ Europe tightens its regulatory framework and this is normal, but it is not supported by coherent trade policies, with free trade agreements signed with countries that do not comply with EU environmental standards. This is today leading to situations of unfair competition. The EU, which used to defend European food sovereignty, no longer seems to do so. If prices do not continue to compensate for the increased risk in beet growing, then it will ultimately lead us to a gradual decline in acreage, and ultimately to Europe losing its status as a major beet producer. But this is not the end of the story and Europe still has a card to play! That of a premium market offering its customers a decarbonised sugar that meets their requirements and commitments in terms of sustainability. This implies very substantial investment in our industrial sites, but also in supporting our farmers in the transition to a more resilient, low-carbon model of agriculture. Here again, the price of sugar must keep up to enable our growers and our industry to adapt. Definitely this is the card we, at Tereos, want to play!
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