Analysis Sugar
'Regional differences most significant in 20 years'
The factories of Cosun Beet Company in Groningen and Dinteloord have restarted today (September 17) for the 2024 beet campaign. This is three days earlier than last year. The company expects a 7% smaller sugar yield. Due to fewer tons of beet, the campaign will also be about ten days shorter. In Germany, several processors have already been working on the new harvest for ten days.
Cosun Beet Company sticks to the yield expectation of 79 tons per hectare, which it already anticipated in July. This is six tons below the five-year average. Cosun expects 13 tons of sugar per hectare from a total of 7.1 million tons of beet. "The acreage has increased by 5% this year, making a higher (sugar) yield likely. Due to late sowing, this is estimated to be 7% less," says CEO Paul Mesters.
The sowing period lasted three months instead of three weeks. This has resulted in significant regional differences that have not occurred in the last twenty years. Due to the smaller yield, the campaign will last 127 days instead of 138 days last year.
Sweet beet
In Germany, several factories have already been processing sugar beet for some time. Sometimes these are organic beet. In the East German town of Anklam, Cosun started processing on September 11.
Trial harvest figures from early August show a root yield of 56 tons per hectare, which is lower than last year. The measured sugar content of 16.2% was significantly higher. Cosun assumes it is now around 18%.
Nordzucker started processing at the end of August in Opalenica, near Poznan in Poland. The factories in Germany, Denmark, Finland, Lithuania, Denmark, Sweden, and Slovakia will follow shortly. According to Lars Gorissen, CEO of Nordzucker, the trial harvest figures show above-average root and sugar yields at the start of the campaigns in Europe.
More beet
The industry association Wirtschaftliche Vereinigung Zucker expects an average yield of 81.9 tons per hectare in Germany this year. This is 7.6% more than the five-year average of 76.1 tons per hectare. The sugar content, at 17.2%, is slightly lower than the average of 17.38%. Thanks to a significantly increased acreage of 385,596 hectares (+21,000 hectares), an estimated 31.59 million tons of beet will be harvested this year. This represents a 6% increase compared to last year when 29.81 million tons were harvested. These tons will yield 4.77 million tons of sugar, compared to 4.22 million tons last year.
However, the industry association is concerned about crop health. Cercospora has significantly affected the crops due to a combination of moisture and high temperatures. Southern Germany is experiencing damage from leafhoppers, and the yellowing virus is also affecting yield. Therefore, grower organizations DZV emphasize the need for a well-stocked toolbox of crop protection agents, which are currently not working effectively.
Precipitation
For this reason, Pfeifer & Langen started cicada monitoring this year. The sugar beet crops in their area have been significantly affected by weather extremes. Planting was late, extending until the end of May, resulting in crop growth being two to three weeks behind. Only in the area around the factory in Könnern in Saxony-Anhalt did planting start under good conditions. The campaign began here on September 10. The location near Bielefeld also started on that date. Appeldorn followed two days later, and the last factories, along the Dutch border in Jülich and Euskirchen, will start on Wednesday.
Despite late planting, the campaign started slightly earlier to avoid shifting it too far back. Pfeifer & Langen expects yields that are just above the multi-year average. Predicting sugar content, in particular, is challenging.
Südzucker adjusts figures
In Plattling, East Germany, Südzucker also started the campaign on September 10. The start date for the campaign at Tiense Suiker in Belgium has not been announced yet. Iscal Sugar will start processing on September 18 and expects a 115-day campaign. Südzucker announced on Monday, September 16, that it is lowering its profit expectations due to lower sugar prices. The sugar division of the company is even expected to incur a loss in the second half of the financial year, which runs until February.
The last quarterly figures show a result that is more than halved compared to last year, at €115 million. As a result, the share price dropped by more than 5%, leading to a temporary halt in trading the stock. For 2024/25, the group now expects a revenue between €9.5 billion and €9.9 billion. Previously, the expected result was above €10 billion. The bottom line is expected to have a net profit of €172 to €275 million, compared to the €500 to €600 million expected earlier. The company attributes the significantly lower profit expectations mainly to lower global sugar prices and uncertainties related to the war in Ukraine and tensions in the Middle East.
