European sugar prices collapse to 3-year low

European sugar prices have fallen to a three-year low of €536 per tonne. Low prices, overstocking and weaker demand are weighing on European producers’ profitability, with companies warning of closures, the Financial Times reports.

The industry is growing pessimistic, with leading European producer Cristalco saying the market is “unable” to break even at current prices. Speculators have also built up their biggest short position in New York sugar futures since 2019.

European sugar producers’ financial results have worsened. Tereos’ April-June revenue fell 25% to €1.2 billion, while EBITDA fell 79% to €56 million. The company recorded an operating loss of 22 million euros, net debt rose to 2.27 billion euros.

At Südzucker, operating profit in the first financial quarter fell by 85% to 22 million euros, the sugar division received an operating loss of 56 million euros and expects a loss of up to 200 million euros for the year, despite the forecast rebound in prices in the second half. Cristal Union reported a 62% drop in net profit to 117 million euros and warned of “significantly worse” market conditions.

Against the background of a decline in indicators since the beginning of the year, five sugar factories have already closed in Europe, and the number of operating enterprises has decreased to 83. Beet crops are also decreasing, according to various estimates, by almost 10%, because farmers are not ready to sell at a loss.

At the same time, the cost of sugar production in the EU has increased by about 200 euros per tonne since 2017 due to rising energy prices, plant protection products and climate risks. Producers complain about the “gap” between the EU’s stricter environmental standards and trade policy, which opens up duty-free access to imports from countries without similar requirements.

Thus, in 2023-2024, the EU received more than 1 million tonnes of sugar from Ukraine, which increased stocks and increased price pressure. At the same time, since July, Brussels has reduced the relevant quotas by 80%.

Demand is also weakening, and among additional risks, analysts point to the subsidence of related markets – about 30% of sugar sales are tied to cocoa, and the decline in chocolate consumption is also hitting sugar producers.

It was previously reported that Ukraine exported 580,000 tons of sugar during the 2024/25 marketing year, which ended on August 31, which is 32% of the country’s production. Exports were 16% less than in the previous marketing year, when 692,000 tons were sent to foreign markets.

Tags: Ukraine, EU, prices, sugar