Europe Sugar Output Set for 10-Year Low Amid Tight World Supply

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Or sign-in if you have an account.a[6{atgi4ij51y0zafgvrjmk_media_dl_1.png European Commission(Bloomberg) — Europe’s sugar output is set to fall to the lowest in more than a decade as hot weather damages an already smaller beet crop, tightening global supplies under pressure from a powerful El Niño.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountProduction in the European Union and the UK is set to fall to about 15 million tons, the lowest level since the 2015 season, according to data from S&P Global Energy. A series of heat waves this summer have battered yields for the current season after acreage had already declined for a second straight year as producers curbed output after bumper crops depressed prices.That adds to mounting concerns about a potential worldwide deficit as the El Niño weather pattern looms over cane production in several key Asian producers including India and Thailand. That fear has already sent sugar futures in London and New York up about 5% so far this month.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“The lower crop will contribute to deficits in the first and second quarter of next year and that’s already being priced in the market,” said Claudiu Covrig, lead analyst at Covrig Analytics. With exports from Europe missing or at least reduced to a minimum, “prices will go further north.”The European Commission’s MARS crop-monitoring unit last week cut its forecast for EU beet yield to 76 tons per hectare, down 7% from a year earlier, citing unfavorable weather. While that’s near the five-year average, the prolonged heat has eroded any cushion for the crop, potentially pushing the EU to turn into a net importer of the sweetener, StoneX analyst Pedro Antiquera said in a note.The outlook could deteriorate even more as weather forecasts continue to point to above-normal temperatures and limited rainfall, worsening already depleted soil moisture levels, according to Marina Malzoni, principal analyst for soft commodities at S&P Global Energy.Covrig Analytics has cut its output forecast for the EU and UK to 14.7 million tons, the lowest since 2022 when high temperatures hurt output and sent prices soaring. The European Commission expects output in the EU alone to slip to 14.1 million tons.“With acreage continuing to contract, the sugar beet crop has become increasingly vulnerable to yield shocks,” said Malzoni. “Prices are expected to increase in the near term as the supply-demand balance tightens.”That could be a silver lining for European processors after two consecutive bumper harvests when the region was awash with sugar and a price slump squeezed their margins.Sugar prices in the region have risen as much as 9% since June, lifting the premium that white sugar futures command over raw sugar, according to Arnaud Lorioz, chief executive officer of Paris-based brokerage Deepcore. Still, a sustained recovery for processors will require a further reduction in supplies because Europe could still produce a small surplus, Stephan Büttner, chief executive at Austrian sugar producer Agrana, said in an earnings call last month.(Sign up for Business of Food, a weekly newsletter that looks at how the world feeds itself in a changing economy and climate.)—With assistance from Agnieszka de Sousa.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.