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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Ukrainian Deputy Prime Minister for Restoration - Minister for Communities, Territories and Infrastructure Development Oleksandr Kubrakov has met with Polish Infrastructure Minister Dariusz Klimczak. The relevant statement was made by Ukrainian Deputy Prime Minister for Restoration - Minister for Communities, Territories and Infrastructure Development Oleksandr Kubrakov on Facebook, an Ukrinform correspondent reports. “We held the first meeting with Poland’s newly appointed Infrastructure Minister Dariusz Klimczak in Warsaw. Several transport issues were discussed, but the main topic was lifting the border blockade. We presented the key figures and analytical data of freight traffic operations carried out by Ukrainian and Polish transport companies, which show that the problems that the protesters are talking about do not actually exist,” Kubrakov wrote.
This notice is to inform you of the next round of sugar import quotas which are detailed in Annex 1. Details of the quantities available are also included in Annex 1. If this is your first application of the quota year you must provide evidence to prove that you have imported at least 25 tonnes of sugar.
British Sugar and NFU Sugar have concluded negotiations and agreed a deal for the 2024/25 sugar beet contract. Both parties recognise that growers’ appetites for risk vary and choice is important, therefore growers can select from a number of options: a £40 per tonne fixed price (as per the 2023/24 price) a core price of £38 per tonne plus a market-linked bonus a Futures-linked option, for up to 35% of their contract yield protection at a £1 per tonne reduction on the core or fixed contract price The cash advance option, late delivery allowance, local premium, and frost insurance are the same as last year. This announcement comes after a lengthy negotiation, and both British Sugar and NFU Sugar have agreed that the process has not served the industry well. As part of the continued modernisation of our industry we have therefore agreed a shortened negotiation timeline which will deliver a final price and contract earlier in the year.
The EU’s complex policy approach to biofuels lacks a long-term outlook and risks undermining the bloc’s transport decarbonisation targets, an analysis by the European Court of Auditors (ECA) has found. The ECA, an independent watchdog, examined the EU’s support for biofuels to cut transport emissions, and found that the ever-shifting web of policies have led to an unclear road ahead for the fuels.
Feedstocks certification spike in Italy, Malta flagged as suspect. Europe's 80% import reliance for feedstock reduces transparency: T&E Stakeholders urge tougher controls, warn of price pressure. Data showing an apparent spike in European supplies of used cooking oil -- a key feedstock for biodiesel and sustainable aviation fuel -- has reignited concerns over widespread customs fraud allowing less-sustainable palm oil to be passed off as a waste-based source of biomass in Europe.
In March 2021, a study was published in BMJ Open claiming that the UK sugar tax had led to a 10 per cent reduction in the amount of sugar consumed in soft drinks. Although one of its authors admitted that a decline of this magnitude “might sound modest”, it was presented as a win for public health. The preposterous pressure group Action on Sugar called for the tax to be “extended to other categories” and the 10 per cent figure soon found its way into the National Food Strategy and several World Health Organisation reports. Last week the study was retracted, along with an editorial titled “UK sugar tax hits the sweet spot” that had been published in the British Medical Journal claiming that the tax was “working exactly as intended”. It turns out that tax has not been not working exactly as intended. In a new version of the study, the authors estimate that the decline in sugar consumption from soft drinks was just 2.7 per cent, barely a quarter of the original figure, and that in contrast to the original study, which claimed that there had been no change in soft drink sales, the volume of soft drinks rose by 2.6 per cent.
The Vision and RGS consortiums are battling it out to buy the bank debt that would give them control over Tongaat Hulett. Vision includes a financier who spent a chunk of his career in the service of three notorious Kazakh oligarchs known as "The Trio"; it also includes a company implicated in Pakistan’s so-called "sugar mafia" cartel scandal. Both deny any wrongdoing. RGS is part of the Mozambican Gulamo group, previously called out for its closeness to the ruling Frelimo party. Things have been sour for sugar giant Tongaat Hulett since 2019, when a new management team uncovered accounting failures and alleged fraud that led to a R12 billion reversal in the company's valuation. The criminal trial of key former directors is yet to get properly under way.
London-based commodities broker Marex has filed for an initial public offering (IPO) in New York in a huge blow to the City after a drought of floats this year. Marex confirmed today it has submitted a filing to the US Securities and Exchange Commission for an IPO in New York next year, meaning one of London’s top private financial services firms will opt to list its shares across the Atlantic. Marex, one of the world’s largest privately-owned commodities brokers and clearing houses, reported a 53 per cent surge in adjusted pre-tax operating profit to $121.7m (£97.3m) in April, as net revenue jumped 29 per cent to $701m. The record results come after the firm snapped up ED&F Man Capital Markets last year to boost its metals business and expand in fixed income and equities. The deal saw the firm boost its client funds by 139 per cent to $12bn, with $4.5bn added through the takeover.
The Commission has fined Lantmännen ek för and its subsidiary Lantmännen Biorefineries AB (formerly named Lantmännen Agroetanol AB) (together ‘Lantmännen') around €47.7 million for participating in a cartel concerning the wholesale price formation mechanism for ethanol in Europe. Lantmännen is the largest ethanol producer in the Nordic region and referenced most of its ethanol sales contracts to the monthly average of Platts' ethanol benchmarks during the infringement period. Therefore, the level of Platts' ethanol benchmarks could directly influence the revenues that Lantmännen received from its ethanol sales during that period.
Revenues for the Sugar and Renewables Europe division amounted to €1,298 million in H1 23/24, up 22% at current exchange rates from €1,062 million in H1 22/23. The division's adjusted EBITDA reached €164 million in H1 23/24, up 5% at current exchange rates from €156 million in H1 22/23. The division's recurring EBIT was €127 million in H1 23/24, versus €113 million in H1 22/23. The division's results were driven by the strong performance of our commercial and hedging strategies. For the 2023/24 campaign, the annual B2B sugar contracting campaign was concluded at an average price above 860 per tonne in Europe.
From energy prices to food inflation, and from geostrategic tensions to coups d’état and outright wars, the wider public has been overwhelmed with bad news flooding the media coverage of commodity market upheavals. Central among them is the extent of food inflation, whose level and especially whose path is in deep contrast with anything we have seen in the past. With several studies ongoing on the various aspects of the green transition of EU’s agriculture, it is of paramount importance that their starting point is driven by baselines whose main underlying assumptions are common. This is also essential if synergies between economic and physical models are to lead to better coordinated analyses that are not based on nice graphs, where everything is linked to everything, but on estimated parameters that provide solid quantitative assessment of such links.
Ukraine grain row extends to sugar, poultry imports to EU. Amid a surge in Ukrainian exports to the EU, the European Commission insists trade is flowing well but admits there is “some risk” of imports driving down prices and threatening local production for poultry, eggs and sugar.
European renewable ethanol is a domestic solution to address Europe’s dependence on fossil fuels. In 2022, bioethanol from ePURE members reduced greenhouse gas emissions by more than 78% compared to fossil fuels – a figure that only rises year by year. Most cars on the road today can effortlessly make the switch to ethanol-blended fuels – like E10 (which contains up to 10% ethanol) – and so can most petrol stations. If all petrol cars in the EU were to switch to E10 fuel today, the impact on CO2 emissions would be equivalent to taking 82 million cars off the road and avoiding 42 million barrels of oil imports. Existing carbon emissions are offset: the CO2 released from the use of ethanol in vehicles is offset by the CO2 captured by the crops grown for ethanol production. In 2022, European biorefineries captured 1.1 million tonnes of CO2.
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."