EU Sugar Output Could Drop Further As Growers Turn Away From Beet
Sugar production in the European Union could drop sharply in 2019/20 as farmers consider slashing plantings and switching to other crops amid depressed prices, industry participants said on Tuesday....
Sugar production in the European Union could drop sharply in 2019/20 as farmers consider slashing plantings and switching to other crops amid depressed prices, industry participants said on Tuesday.
European producers are not planting extra beet area and some are turning to other crops offering better returns, Martin Todd, managing director at LMC International, told the International Sugar Organization's annual seminar in London.
"Growers are finding beets are no longer the attractive crop it always was," Todd told attendees.
The ISO has forecast the EU will produce 17.9 million tonnes of sugar in the 2018/19 season, down from 19.7 million in the previous season. The inter-governmental body has not yet issued a forecast for 2019/20.
Historically, farmers typically planted extra area to ensure they are able to meet their contracts with processors if weather conditions dented their crop.
"You've seen people tighten up on area to deliver as near to contract as possible," said Michael Sly, chairman of Britain's National Farmers' Union.
"Sugar beet used to be one of the best paying crops in the rotation. That's unlikely to be the case going forward."
German farmers have reduced plantings by 7% in 2018 and could cut back further next season if prices remain depressed, said Hans-Joerg Gebhard, chairman the country's sugar industry association WVZ.
"We have to bring down production," Gebhard said. "We have to bring it down 20% at least - and hopefully then we will face better prices."
A ban on neonicotinoids, a type of insecticide that has been restricted by the European Union to protect bees, could also dent output from the bloc.
Eric Laine, president of French beet growers' group CGB, said yields could be cut by up to 50% in the case of a severe outbreak of pests.
"We need these plant protection products to ensure the crop survives," Laine said. "At the moment, that's the only solution we have."
The European Union scrapped production quotas in October 2017, allowing producers to grow as much beet as they wanted for the first time since 2006 and leading to a surge in output.
The bloc hoped the liberalisation of the market would help the EU regain its mantle as a net exporter to the world market.
However, a global glut pushed world sugar prices to their lowest in more than a decade this year, throwing the European sector into crisis.
"The reform has been a disaster - for our balance sheet, for the growers," said Giovanni Tamburini, vice president of CoProB in Italy. "Our aim should be to correct this situation."