News and views

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18/12/2024

Engineering News (South Africa)

Tongaat Hulett to sell all South African assets, operating businesses to Vision Sugar

Tongaat Hulett has announced that it will proceed with the sale of all its assets and operating businesses in South Africa to Vision Sugar South Africa. The purchase price for Tongaat Hulett's South African assets will be the fair market value determined by an appointed independent valuer, whose decision, absent any manifest error, shall be final and binding on the parties, plus an amount equal to the assumed liabilities, the company said in a statement.

13/12/2024

ACP/LDC Sugarcane Industries Group

ACP/LDC Sugarcane Industries Group strongly opposes EU/Mercosur free trade deal

The African, Caribbean, Pacific, and Least Developed Countries’ Sugarcane Industries Group strongly opposes the EU/Mercosur free trade deal and urges the European Commission to renew consultations with ACP and LDC countries with a view to respecting the EU’s Economic Partnership Agreements legal obligations and “policy coherence for development”.

13/12/2024

Club of Mozambique

Mozambique political unrest disrupts Eswatini sugar exports – VOA

In the wake of political turmoil and protests in Mozambique, Eswatini’s sugar industry has faced disruptions to supply chains and exports and has had to find alternative routes for its products. Eswatini’s sugar industry depends heavily on a terminal at the port of Maputo, Mozambique, to send its raw sugar to the European Union and the United States. This terminal, jointly owned by Eswatini, South Africa, Zimbabwe and Mozambique, has been vital for the country’s sugar industry since the mid-1990s. Nontobeko Mabuza, with the Eswatini Sugar Association (ESA), warned that the unrest in Mozambique poses a grave threat to Eswatini’s exports to regional and European markets. See also: http://www.times.co.sz/business/148485-impact-of-mozambique-unrest-to-eswatini-sugar-industry-durban-po.html

11/12/2024

ING Bank N.V.

EU production continues to tick higher - ING

The EU sugar market continues to look increasingly comfortable, reflected in the weakness in regional prices. This has been largely driven by a recovery in EU output in 2023/24 and the expectation that output will continue to increase in the 2024/25 season, which is expected to see EU ending stocks edging higher. Production in the EU over 2024/25 is forecast to increase by around 1mt YoY to 16.6mt, which is driven by a combination of higher area and also an improvement in yields. French beet yields are expected to come under pressure – but this should be offset by larger area.

11/12/2024

European Commission

Decreasing EU sugar prices increase pressure on beet area and limit sugar production - EC medium term outlook

After a record increase in sugar prices in 2023, the EU sugar beet area reached a 6-year high in 2024/25 of over 1.6 million ha. These prices have started to come down and are projected to further decline, while the competition for land use by other crops is expected to increase, therefore the area of sugar beet is expected to slowly decrease to 1.44 million ha by 2035. Exports have hit a multi-year high in 2023/24 but are projected to slowly decline with the decrease in sugar production. Sugar imports are expected to slowly decline towards 1 million t by the end of the projection period.

9/12/2024

Bloomberg

ICE Move to Limit Gene-Edited Sugar in US May Hurt Brazil Flows

Exchange’s rule for 2026 will require non-GMO certifications. Top grower Brazil approved world’s first GMO cane in 2017.

6/12/2024

European Commission

EU and Mercosur reach political agreement on groundbreaking partnership

No new sugar quota will be created for Brazil. Brazil has been using a tariff quota allocated under the EU’s WTO schedule with an in-quota duty for its sugar exports to the EU. With the agreement, 180 000 tonnes of raw cane sugar for refining will be allowed into the EU duty-free under this existing quota. A new duty-free quota of 10 000 tonnes was agreed upon for Paraguay only. Speciality sugars are excluded from the agreement. The agreed amounts cover a volume accounting for 1.2% of EU sugar consumption (around 16 million tonnes). A duty-free quota of 450 000 tonnes will be opened for ethanol, to be used by the chemical industry. A quota of 200 000 tonnes will be opened for all other uses, to be phased in gradually over five years. This can be used for the fuel segment of the market, which represents by far the biggest chunk of EU ethanol consumption. Of the 6 million tonnes of ethanol consumed every year in Europe, 4 million are used for fuel.

3/12/2024

BMA Braunschweigische Maschinenbauanstalt GmbH

BMA completes project to refine raw cane sugar at the Wanze sugar factory in Belgium

For about one year, BMA Braunschweigische Maschinenbauanstalt GmbH has been assisting Wanze sugar factory, a member of the Südzucker Group, in a special project: the integration of raw sugar from cane into their production process, which has been exclusively based on beet so far. To realise this ambitious project, the Belgium-based sugar factory charged BMA with the concept study, the engineering work and the supply of the necessary equipment. BMA has manufactured and delivered the equipment for the expanded production process. This includes the tank for large-scale raw sugar melting, a revolving-arm mingler, two big feed solution tanks, and three smaller tanks including one each with agitator for molasses and sugar to be melted from low-raw sugar crystallisation. In just one year – and before the beginning of the beet campaign in September – BMA has successfully completed the engineering, supply, and supervision of assembly for the integration of raw sugar from cane into the production process for the Wanze sugar factory. Commissioning was successfully performed in spring 2024.

3/12/2024

Südzucker AG

Südzucker develops paper and packaging material from sugar beet

Südzucker is launching a high-quality fibre for the paper and packaging industry. BeetKraft® is made from co-products that arise during sugar production and processed into a high-quality substitute for wood-based pulp using a patented refining process. BeetKraft® enables paper producers to replace up to 40 per cent of the classic, primary wood fibres, such as bleached hardwood kraft pulp, in the paper recipe, while simultaneously increasing the stability of the cardboard and paper. This also makes it possible to reduce the overall weight of packaging. BeetKraft® is particularly suitable for kraft paper applications or folding boxes and can also be used for cardboard and containerboard. The paper produced has already been successfully used on a trial basis in demonstration and industrial plants for packaging sugar products, among other things, after a declaration of compliance with food safety regulations had been issued. BeetKraft® can be used to produce paper for direct contact with dry, non-fatty foodstuffs. The papers have an appealing, high-quality and natural look, which allows the consumer goods industry to stand out on the shelf.

2/12/2024

AGRANA

AGRANA and INGREDION plan joint venture in Romania

AGRANA Stärke GmbH, a subsidiary of AGRANA Beteiligungs-AG, has signed a joint venture agreement with starch producer INGREDION Germany GmbH for the joint further development of starch production in Romania. On the basis of the agreement, which is subject to the approval by the competent competition and regulatory authorities, INGREDION Germany GmbH will acquire 49% of the shares in S.C. AGFD Țăndărei s.r.l. from AGRANA Stärke GmbH. “We want to drive our growth in Europe by entering into a joint venture and we believe INGREDION is the ideal partner for this. The collaboration combines our different expertises in starch production and fits perfectly with our Group strategy 'Next Level'. We’re implementing the strategy step by step, and strengthening our commodity and specialty business consistently, is a central aspect,” explains Stephan Büttner, CEO of AGRANA Beteiligungs-AG.

2/12/2024

UK Office for Environmental Protection

UK emergency neonic authorization may have failed to comply with environmental laws - OEC

The Office for Environmental Protection believes Defra may have failed to comply with a number of environmental laws when granting emergency authorisations for use of a neonicotinoid pesticide in 2023 and 2024. In particular, the potential failures relate to Defra’s interpretation and application of the precautionary principle and compliance with its nature conservation obligations when it considered granting the emergency authorisations in 2023 and 2024. The investigation results from a complaint submitted to the OEP by ClientEarth.

1/12/2024

Fortune

France’s proposed new sugar tax could transform the biggest food companies—will the consumer pay the price?

In 2012, the government introduced a tax on sugary drinks, and then again in 2018 arguing they’re too easy to drink and possibly addictive. Every year, French people consume more than 21 liters of sugary drinks, and this tax raised about €443M in 2023. Now that the French Senate has voted to make fizzy and sweet drinks much more expensive, this sum could easily double in 2025.

25/11/2024

Valor International

Tereos CEO criticizes EU-Mercosur trade agreement

Olivier Leducq, CEO of the French sugar-and-ethanol group Tereos, has expressed opposition to the approval of the European Union-Mercosur trade agreement in its current form, warning of significant impacts on the sugar and ethanol sectors. “At a time when our cooperative members are focused on implementing regenerative agricultural practices, how can our farms compete with imports that fail to meet the same environmental and social standards?” Mr. Leducq questioned in a LinkedIn post.

20/11/2024

Tereos

Against a backdrop of sugar falling prices, Tereos is maintaining its performance

In the first half of Tereos' financial year (April 2024 – September 2024), revenues amounted to €3,226 million, down 11% compared to H1 23/24. This is explained by a drop in prices in Europe for sweeteners and for starch products compared to the same period in the previous year – a year when results reached record levels. Revenues for the Sugar and Renewable Europe division amounted to €1,230 million in H1 24/25, down 5% at current exchange rates from €1,298 million in H1 23/24. The division’s adjusted EBITDA reached €193 million in H1 24/25, up 18% at current exchange rates from €164 million in H1 23/24. The division’s recurring EBIT was €152 million in H1 24/25, versus €127 million in H1 23/24. The annual B2B sugar contracting campaign for 2024/25 in Europe was concluded at an average price close to €530 per tonne. The negotiated prices followed a downwards trend during the contracting period (July–October), going from around €700 to around €450 per tonne and ending the period at a level close to export parity. The significant drop in the average price compared to the previous campaign (€860 per tonne) can be explained by the high level of imports, particularly from Ukraine, and by the sharp increase in beet areas in Europe for the 2024/25 campaign. The situation could change for next year, with announcements by several European producers pointing to a potential decrease in beet areas.

12/11/2024

WVZ

SBR (low sugar syndrome) leaves clear traces in Germany's harvest and production estimates

What the sugar industry feared at the beginning of September has now happened: the bacterially transmitted infectious diseases SBR (low sugar syndrome) and Stolbur are leading to high yield and quality losses in the sugar beet harvest. The glasswinged leafhopper has spread massively in many growing areas. The diseases it transmits, SBR and Stolbur, have led to leaf loss and rubbery beets. Last year, 40,000 hectares were affected, but this year it is at least 75,000 hectares. The result is a significant drop in sugar content and expected sugar production - despite higher beet yields. Never before has there been such a significant drop from the 2nd to the 3rd estimate. The expected sugar production was revised downwards by 6%. The sugar content fell by 0.7 percentage points.

11/11/2024

AGRANA

AGRANA now expects very significant EBIT decline in 2024|25 financial year

It had already been communicated that, due to higher sugar inventories and sharply falling sugar prices (in the EU and globally), AGRANA’s Sugar segment in particular would continue to face very challenging times in the coming months. Since the full-blown start of the sugar beet processing campaign in October 2024, it has also become evident that the campaign costs of the new 2024|25 sugar marketing year will be higher than expected. In the meantime, the evaluation of September’s flooding damages (primarily in Austria) has also been largely completed. The negative impact on earnings in the current financial year has been higher than originally forecast, mainly due to the production stoppage at the plant in Pischelsdorf, Austria, in the Starch segment.

8/11/2024

European Parliament

The role of commodity traders in shaping agricultural markets

This study provides an overview of the impact of commodity traders on agricultural markets. It examines the ramifications of financialisation, explores prevailing trends, and confronts the challenges that characterise the industry's landscape. Moreover, after analysing the regulatory state of play at the international level, it provides suggestions towards bolstering the sector's accountability and transparency, essential for fostering trust and sustainability. By scrutinising these aspects, this study offers insights into the intricate dynamics of agricultural trading and its broader socioeconomic implications.

5/11/2024

ABF

ABF reports growth for sugar segment in 2024

In Sugar, as previously announced, we expect the reduction in European sugar pricing in Q4 2024 to impact performance in our sugar business significantly in 2025, with adjusted operating profit for the overall Sugar segment expected to be in the range of £50m to £75m. However, we expect profitability to recover in 2026 to be more in line with 2024, as a result of the lower beet prices that have been contracted and a rebalancing of supply and demand in the market. In Agriculture, we expect some improvement, particularly as our grain trading business recovers in the UK.

11/10/2024

gov.uk

UK ATQ quota for raw sugar to be maintained at 260,000 tonnes in 2025, but there will be another review for 2026 - gov.uk

The previous government implemented an Autonomous Tariff Quota (ATQ) on raw cane sugar on 1 January 2021 following the UK’s departure from the EU. Following subsequent reviews of this ATQ in 2021 and 2023, the previous government maintained the volume level of this ATQ at 260,000 tonnes and committed to reviewing this again in 2024. On the basis of the review carried out in 2024, the government has decided to maintain the raw cane sugar ATQ for 2025 at the existing volume of 260,000 tonnes and maintain the UK Global Tariff (UKGT) rate at the same level (£280 per tonne for raw cane sugar for refining) to minimise disruption to the sugar market in the short term and balance other concerns. The government will make an announcement in due course on the process for determining the ATQ and related considerations for 2026 and subsequent years.

10/10/2024

Bloomberg

Europe’s Sugar Companies See Profits Tank on Strong Supplies

Europe’s sugar companies are facing revenue pressures, after last year’s stellar performance, as increased supplies are pushing down prices and hurting their bottom line.

20/9/2024

National Association of Sugar Producers of Ukraine

Ukraine exported more than 691 thousand tonnes of sugar

According to the results of the 23/24 marketing year (September 2023-August 2024), Ukraine exported 691.8 thousand tonnes of sugar, of which 77% came to EU countries, 23% — to the global market. The main importers of Ukrainian sugar among the EU countries are Italy, whose share in Ukrainian sugar export to the EU reached 19%, Bulgaria (18%) and Hungary (14%). The main export destinations outside the EU are Cameroon (17% of the global market export), Libya (15%) and Turkey (11%).

5/9/2024

Associated British Foods

ABF Sugar performance "mixed" - ABF trading update for Q2 2024

The performance of the ABF Sugar business has been mixed, according to an update on trading during the second half of the financial year which will end 14 September 2024. "Overall, we expect Sugar to deliver adjusted operating profit of approximately £200m, which is still strongly ahead of last year but, due to a reduction in European sugar pricing, lower than previously anticipated. Europe was challenging overall in H2. Production levels have been strong, benefiting from the return to a more typical sugar beet crop in the UK. However, we have seen sharper than expected falls in UK and European sugar pricing due to increased supply in the market. As a result, both of our European Sugar businesses have experienced a negative impact to sales and profitability in Q4. On a constant currency basis, our overall African sugar business has grown well in H2. We have had a strong performance in Zambia and South Africa, whereas in Malawi and Tanzania, high rainfall has impacted sugar cane yields and production this year. In Tanzania, this has led to unexpectedly high volumes of sugar imports and lower prices. On an actual currency basis, our African sales are expected to decline in H2 due to the impact of foreign exchange translation. The operational performance of Vivergo, our bioethanol plant in the UK, has continued to strengthen in H2 albeit the margin has continued to be mixed during the period.

3/9/2024

Competition and Markets Authority

UK CMA clears T&L Sugars deal to buy Tereos UK & Ireland’s retail sugar business

The Competition and Markets Authority (CMA) has today cleared T&L Sugars Limited’s (TLS’) deal to buy Tereos UK & Ireland’s retail sugar business, following an in-depth Phase 2 investigation led by an independent inquiry group. The clearance comes after the inquiry group explored concerns that the deal could reduce competition in the UK. Only three businesses (including TLS and Tereos’ UK retail business) supply the large majority of sugar to customers such as supermarkets and restaurants. However, having conducted a thorough investigation, the inquiry group found that, without the deal going ahead, the most likely outcome would be that Tereos’ UK retail business would close. Since closure would also result in a loss of competition absent the merger, and the evidence showed that there was no other alternative and less anti-competitive purchaser for the business besides TLS, the group has decided to clear the deal. Richard Feasey, Chair of the independent inquiry group carrying out the Phase 2 investigation, said: "Having reviewed a wide range of evidence – including detailed financial information on Tereos’ UK retail business and the efforts they have taken to try and improve its performance – we believe that the right outcome is to clear this deal"

3/9/2024

Temoignages (Réunion)

La Réunion Island: Farmers’ income at the heart of the crisis in the cane-sugar-alcohol-energy sector

For over 20 years, the industrialist who buys all the sugarcane harvested by farmers has paid a price that has not changed. Public subsidies from the French State and the European Union compensate for the rise in production costs, not the buyer. In these conditions, it’s hardly surprising that the area planted with sugar cane and the number of farmers are falling. The creation of new, more productive varieties should not obscure the essential point: farmers must make a decent living from their work by selling their produce at a fair price.

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