EU sees need to protect internal sugar market

Good yields can have a downside for producers, as currently seen in the European sugar market. Although the beet area in the EU has shrunk by around 8% for the 2025 growing season, sugar production has declined far less, resulting in an oversupply. This imbalance is not limited to Europe, as developments in the London and New York futures markets also point to ample global supply. The international sugar market is under significant pressure. On the New York exchange, sugar fell to its lowest point in two and a half months. On the London futures market, sugar even closed last Friday at its lowest level in five years. In the Netherlands, the sugar campaign has been completed. The yields were generally good. Cosun reports that the yield averages 15.6 sugar per hectare. Overall sugar production in the EU is estimated by the USDA to be 15.3 million tonnes. This means that sugar production is 1 million tonnes lower than last season. This is mainly due to an 8% reduction in the area. Due to good yields of sugar beets in the EU, sugar production might turn out to be higher than currently projected according to some analysts. Reference price under pressure The European reference price for sugar was under pressure due in part to those good yields. In December, sugar on the internal market averaged €518 per tonne, as stated in the report of the latest sugar consultation held in Brussels last week. This makes the sugar price €141 per tonne, or 28% lower than in December 2024. Considering these developments, it's not surprising that voices from the sugar sector are calling for Europe to take action. The European Commission has proposed to temporarily suspend the so-called Inward Processing Regime (IPR), which allows companies to import sugar without import duties for processing and export outside the EU. With this proposal, Europe aims to ease the pressure on the internal sugar market. Sugar prices on the internal European market have been under pressure for some time, and producers and growers complain about unfair competition. In the past year, the import of raw sugar under IPR increased by 19% compared to the previous season to 587,000 tonnes. 95% of the sugar imported under this scheme came from Brazil. The import of white sugar rose by 5% to 155,000 tonnes, of which 43% came from Brazil. The rest came from Morocco, Egypt, and Ukraine among others. Unfair competition European sugar beet producers have expressed their concerns about unfair competition and the potential consequences of the Mercosur trade agreement between the EU and South American countries. South America would be allowed to sell more sugar in the EU under the treaty. European producers argue that the import of sugar is undesirable given the current market. The general sentiment from the European sugar sector is that anything entering the EU now is already too much. Sugar production in Brazil was slightly higher in December. Sugar production increased by 0.9% to 40.22 million tonnes according to statistics from Unica. The ratio of sugarcane that is processed into sugar rose from 48% in the 2024/25 season to 51% in the 2025/26 season. The latest estimate of the sugar harvest in Brazil by Conab (the agency of the Brazilian Ministry of Agriculture) dates back to November but estimated a record harvest of 45 million tonnes at that time. Market agency Safras & Mercado was slightly lower in its last forecast at 43.5 million tonnes for the 2025/26 season. For 2025/26, Safras & Mercado anticipates a harvest of 41.8 million tonnes, of which 30 million tonnes will be exported.