Sweet beet but European sugar industry cracks

A significant number of sunshine hours in the European beet countries has ensured that the sugar levels are doing well. However, the crops need to be healthy, which is particularly a challenge in Germany. The feared SBR disease has also been detected in the Netherlands. The sugar market tastes more bitter than sweet, with the lowest prices in over four years. This is felt by the European sugar producers. The beet prices are set to drop significantly. In the Netherlands, the sugar content remains stable, just above 17%. This is good for the time of year. There is little visibility of an upward trend. This is not surprising given the high start and average high temperatures this autumn. In Southwest Netherlands, the contents are considerably higher, often well above 18%. On sandy soils, the content sometimes lags behind. This variation in contents can be explained. In the middle and north of the country, the yields are generally excellent. This dilutes the contents compared to lower weights in the southwest. Disruptions With the arrival of more rainfall, the tare levels have also gradually risen. By mid-October, the national average was at 8.3% with a range from 5.2% in Twente to 11.5% in eastern Flevoland. The campaign has run worse before, with processing levels of over 60,000 tons per day. Only the factory in Groningen was plagued by several disruptions this week, and also at the beginning of October, causing processing to temporarily halt. In early October, the IRS reported that the dreaded SBR disease (Syndrome Basses Richesses) was found in at least four samples this season. This is not the first time, but it is a concerning development that is gripping the European beet sector. In Germany, the damage is the greatest. More than 100,000 hectares are infected, resulting in significant yield losses. Furthermore, for the first time this year, stabilization in the number of infestations is visible. SBR, which is transmitted by the glasshouse leafhopper, can also cause significant damage in potatoes and onions. Control is hardly possible due to a lack of effective insecticides. Winter grain is a known crop where the leafhoppers overwinter. It is recommended not to sow wheat or barley after infested beet. Larger French yield In France, it is primarily the beet yellows virus that causes yield loss. According to the ITB, the French counterpart of the IRS, this causes yields to fluctuate between 40 and 100 tons per hectare. The damage is exacerbated by drought. The average sugar percentage is at 18%. The Ministry of Agriculture Agreste has raised its forecast for the current campaign to 34.2 million tons. This is an increase of 5% compared to last year and 10.2% higher than the five-year average. The average French beet yield is 86.3 tons per hectare. WVZ, the German organization for sugar producers, estimates in its most recent assessment that there will be 28.25 million tons of beet in the country. This is a slight decrease compared to the previous forecast. The hectare yield is estimated to be lower: at 80.8 instead of 82.6 tons. However, the sugar content is estimated to be average higher (17.6%), which raises the total sugar yield slightly to 4.419 million tons. Lowest sugar price in four years European beet processors are struggling with persistently falling sugar prices on the world market. For example, the FAO Index for sugar fell by more than one-fifth in September, reaching its lowest level in four years. The London Liffe futures market for refined sugar has been significantly dropping since mid-September. On October 22, the contract reached a low of $433.40 per ton, equating to €372.98. This is the lowest price since July 2021. The U.S. sugar futures market fell to its lowest level since April 2021. One of the companies that is struggling is the Austrian food company Agrana. This spring, it already announced that it would close the doors of two beet factories in Austria and the Czech Republic this year. As a result, Austria now has only one factory in Tulln. The area under cultivation in the country decreased this year by 18,413 hectares to 25,000 hectares. This is the smallest beet area ever. Agrana cannot guarantee whether it can keep the only remaining factory open in this sugar market, as CEO Stephan Büttner said in a recent radio interview. Deep red figures The company posted an EBIT of €28 million for the first half of the fiscal year (March through August). This is a halving compared to the same period last year. Revenue fell by 9%. The agricultural raw materials division is largely responsible for this decline. Other branches of the company performed reasonably well to good. Agrana's sugar division achieved revenue of €309.6 million in the first six months, compared to €489 million a year earlier. The EBIT is in the deep red: from -€11.1 million to €36.3 million. This relates to the closure of two factories, which incurred costs of €20 million. At Südzucker, the situation is not much better. In the first six months of the fiscal year, revenue fell by 17.5%. The entire group achieved a result of €4.2 billion, compared to €5.1 billion last year. The EBIT halved during this period, and the sugar division suffered a loss of €89 million. Falling beet prices The low sugar prices on the European and world markets, and disappointing financial figures among beet processors, have an irrevocable effect on the beet prices for 2026. In Poland, processors are preparing their growers for a contract price of €32 per ton (at 16% sugar). Surplus beet are settled at €18.90. This year, the contract price at the national beet processor KGS is €33.50. Last season, €46.50 was paid net. In England, British Sugar has already submitted a contract for 2026 to the growers. A one-year contract amounts to £30 per ton (equivalent to €34.37). Depending on the type of contract, prices for next year will drop by £3 to £6 per ton at the only national sugar processor. The interest group NFU Sugar says it is satisfied with the contract offer, which provides growers with certainty. Whether the beet growers see it that way remains to be seen, judging by the many reactions on social media. This year, with a slightly higher price, there is nothing to be earned from beet cultivation. Next season, it is expected to be no better, so the sentiment goes. Result Aviko solid Royal Cosun is moving contrary to its European counterparts. Here, the guaranteed minimum price has been raised to €37.50 per ton, excluding member surcharge. That was €16.50 per ton last season, with Aviko taking a significant part of this financial bonus. Despite the turbulence in the fries market 'Aviko has had a solid year so far', reported Cosun chairman Arwin Bos recently. This allows Cosun to continue to guarantee a beet price that is above the European price level.