Sugar prices in Europe have risen by 61% compared to last year. The reason for this was the suspension of exemptions for neonicotinoid-treated seeds by the EU Court of Justice.
Beet farmers could be driven out of business if the EU goes ahead with its plans to reduce pesticide use, as yield losses could wipe out farmers’ profit margins, reports Food Ingredients First.
Max Schulman, Vice-Chair of the Seeds Working Group at Copa-Cogeca, commented: “If there are no effective alternatives to crop protection, supply chains will collapse, ultimately leading to the disappearance of local European produce. We are already seeing the consequences: 10% of French farmers have decided to stop growing beet this year, mainly due to the lack of neonicotinoids.”
Markus Scheberl, President of the Austrian Sugar Beet Growers Association, adds that it will be impossible to grow the crop in many parts of Europe if the active substances continue to disappear. In his opinion, the European Commission must opt for an agricultural policy that supports the sustainable production of domestic food.
Urgent political measures
The Confederation of European Sugar Consumers (Cius) predicts that sugar supply will reach its lowest point in September, leading to factory closures and job losses.
Cius is calling on the EU to suspend tariffs on white sugar imports immediately. “Our sugar products with high added value are losing out on exports as they cannot compete with suppliers on the global market,” the association emphasizes.
The forecast of ending stocks for the current 2022/2023 agricultural year shows that 552 tons of sugar will be available to consumers, which corresponds to less than two weeks of the EU population’s sugar consumption.
The global battle for sugar
As the EU suffers from a decline in sugar production, it is becoming increasingly dependent on sugar imports, which are becoming more and more expensive due to drought-related crop failures.
The Food and Agriculture Organization of the United Nations (FAO) reported in April that sugar prices are at their highest level since October 2016. This is mainly due to the worsening production outlook in India, Thailand and China – three of the world’s five largest sugar producers.
India could introduce a new cap on sugar exports, as it did last year, as the country’s largest producing region has lowered its production forecast to 10.5 million tons and cut forecasts by more than 2 million tons in the last four months.
In January, the UK government granted approval for the use of neonicotinoids on sugar beet. However, this has not prevented sugar prices in the country from skyrocketing, as last June the National Farmers’ Union and British sugar producers agreed on a contract for the 2023/2024 marketing year that provides for a price increase of 48% compared to the previous year.
At the same time, it is hoped that the Brazilian sugar cane harvest, which is gradually arriving on the world markets, will lead to some price reductions.
The Food and Agriculture Organization of the United Nations (FAO) comments: “Lower global crude oil prices, which have contributed to greater use of sugar cane for sugar production in Brazil, together with the weakening of the Brazilian real against the US dollar, have helped to limit the monthly increase in world sugar prices.
However, Brazil’s Energy Minister Alexandre Silveira stated that the country is studying the possibility of increasing the mandatory ethanol content in gasoline from the current 27% to 30%, which would reduce the amount of sugar available for export.
If crude oil prices rise, food producers may be tempted to convert their crops into fuel, which would further exacerbate the current food crisis.
Source: Ukragroconsult (Ukraine)