Bloomberg News

Licht Says Europe Sugar Output to Fall From 6-Year High

May 11, 2012

Sugar production in Europe may fall by 2 million metric tons in the season starting in October from a six-year high in the current year as farmers reduce the planted area in Russia and Ukraine, F.O. Licht GmbH said.

Europe’s sugar output is estimated to total 28.2 million tons in 2012-13, the Ratzeburg, Germany-based researcher said by e-mail today. That compares with 30.2 million tons forecast for the 2011-12 season, which was the highest output on the continent since 2005-06, the researcher said.

“While beet drillings in the EU are seen hardly changed from a year ago, there will be an expected reduction in areas in Russia and the Ukraine after the bumper 2011-12 crops in those countries,” Stefan Uhlenbrock, an analyst at the company, said in an e-mailed response to questions.

Russian sugar output is set to climb 60 percent in the current season, according to the U.S. Department of Agriculture. In Ukraine, sugar output for the current season was estimated to rise by 36 percent from a year earlier, USDA data show.

Sugar production within the 27-nation European Union will fall by 1.2 million tons to 16.8 million tons on unfavorable weather, Licht said. Russian producers may make 5 million tons of sugar next season, down from 5.5 million tons in the current year, the researcher estimated.

Russian Farmers

Planted area in the EU will remain unchanged at 1.42 million hectares (3.5 million acres) in the new season, according to Uhlenbrock. Farmers in Russia will plant 1.174 million hectares, a decrease of 6 percent from the current season, as limited capacity leaves factories unable to process all the sugar beets harvested in 2011-12, he said.

“A rather modest decline in area under beet cultivation coupled with another fast and early sowing period in key producers gives cause for the assumption that Europe may be headed for another above-average crop in 2012-13,” Uhlenbrock said in the e-mail. “The EU may be facing a sugar crop that may be more difficult to dispose of at a time of a world market in heavy surplus.”

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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