Saint Louis Sucre, a subsidiary of Germany’s Suedzucker and a sugar producer, has urged French farmers to refrain from increasing their beet production in 2024. This request is aimed at preventing a potential decline in sugar prices, which could result from stiff competition posed by Ukrainian sugar imports. European sugar prices have surged to record highs, surpassing global market rates, primarily due to a sugar deficit within the European Union (EU). This shortfall is attributed, in part, to reduced sugar production in France, where farmers have faced challenges stemming from poor harvests in recent years.
However, the conflict in Ukraine has led to a substantial influx of sugar imports into the EU, raising concerns of a surplus reminiscent of the situation in 2017 when the EU removed production quotas. This previous surplus had caused sugar prices to plummet.
In a letter dated September 6, Saint Louis Sucre (SLS) stated, “Our ambition to increase surface areas…finds itself in competition within the framework of the EU solidarity effort in favor of Ukraine.” The letter also emphasized the company’s aim to ensure that each ton of sugar produced in France aligns with demand and garners the highest possible value in the European market to benefit sugar beet farmers.
Given this unexpected context, SLS called upon historic planters to maintain their 2023 tonnages in 2024, signaling a cautious approach to beet production.
Data from the EU indicated that Ukraine’s sugar imports into the bloc surged to 390,000 tonnes between October 2022 and July 2023, compared to 25,000 tons during the same period in the previous season.
Responding to queries about the letter, a spokesperson for Suedzucker suggested that Ukrainian sugar, which has the potential to disrupt EU markets, should be re-exported to countries in need of food.
French farmers are currently in the process of selecting their crop rotations for the upcoming season. High sugar prices, combined with falling grain prices, may sway some farmers toward choosing sugar beets. However, Franck Sander, Chairman of the French sugar beet union CGB, cautioned against excessive expansion in sugar beet cultivation, which could lead to a sharp drop in EU prices, especially with ample supplies available from Ukraine.
European sugar was trading at 915 euros per ton in July 2023, according to the most recent EU data, marking a 57% increase from the previous year and doubling the price recorded in July 2021.
Saint Louis Sucre, a subsidiary of Suedzucker, shuttered two factories in 2019 as part of a broader restructuring initiative. However, it still operates two factories in northern France.
The European Union is expected to witness a rebound in sugar production in 2023/24, primarily due to increased crop cultivation in Poland, where higher prices have enticed farmers to expand their sugar beet planting areas.
