European sugar production is projected to decline to 15.4 million tonnes in 2026/27 from 17.05 million tonnes in 2025/26, reflecting 7% lower plantings and an anticipated 3% reduction from less favorable climatic conditions compared to 2025.

The production decrease has prompted some market analysts to suggest imports will need to reach 2.5 million tonnes to balance supply. However, this figure appears excessive given current stock levels and uncertain consumption trends.

With EU+UK sugar production estimated at 15.4 million tonnes and demand at 17.4 million tonnes (netting out processed products imports and exports), the calculation points to import requirements of 2 million tonnes. Yet even this may be too high. Commission figures show that in November, stocks were 1 million tonnes higher than in the corresponding period in 2024, suggesting actual import needs could be as little as 1 million tonnes, subject to weather conditions.

Consumption decline complicates supply-demand balance

The widely held belief is that consumption is falling significantly, driven by GLP-1 receptor drugs and sugar taxes that are proving to be a useful stealth tax for governments.

Data from the UK provides concrete evidence of this trend. In the year following the introduction of the Soft Drink Industry Levy, consumption of sugar fell by 5 grams for children and 11 grams for adults just from soft drinks following reformulation. These amounts translate to approximately 2kg and 4kg for children and adults respectively on an annualized basis.

Mapping consumption is complicated and there is no accurate forecasting model. Charts tracking EU consumption show a vivid decline over recent years, creating what producers describe as “the elephant in the room” when calculating import requirements.

Farmers restrict plantings following strong 2025 harvest

Cosun reported processing the last beets on January 25 following a 140-day campaign with high throughput rates and record revenues. The sugar yield reached 15.6 tonnes per hectare with 91.0 tonnes of beet per hectare and 17.1% sugar content, equaling the record yield of 2017. Farmers were invited to purchase supplementary beet seed along with an advisory to restrict sowings to 90% of the previous season.

British Sugar announced this year’s crop will exceed 1.1 million tonnes with yields averaging 78 tonnes per hectare. With the UK Autonomous Tariff Quota for imports now standing at 325,000 tonnes in addition to the Australian raw sugar TRQ, the UK market appears to be in balance to a small surplus if all raw sugar eligibility is exercised.

In Spain, Azucarera and Acor both confirmed paying unchanged beet prices of between €44 and €45 per tonne for the coming season, with Azucarera encouraging farmers to increase plantings. In Poland, farmers confirmed that after oilseed rape, beet proved to be their most profitable annual crop.

In Germany, Südzucker said objectives to lower beet area in Offenau were on track, while growers in Saxony Thuringia were looking at a 10% reduction. In Upper Saxony, area was planned to be unchanged.

Inward Processing Relief suspension announced

The Agriculture Commissioner announced he is minded to invoke a temporary suspension for Inward Processing Relief. The announcement was met with relief and gratitude by CEFS, CIBE and the ACP group who have been lobbying to stop abuse of the original system. Port refiners, ESRA, CIUS and the Fermentation Group were less enthusiastic about the proposal.

The terms of the suspension are now awaited, but given bureaucratic processes, implementation could take 2 or 3 months. During the suspension period, the Commission would propose and seek approval for long-term safeguards.

Companies using the IPR system will likely not wait for any suspension to take effect and will probably front-load their world market requirements, as any suspension is unlikely to be retroactive. The longer it takes to implement the suspension, the greater the risk of augmenting stocks.

Price environment remains stable

There has been little or no change in prices over the past fortnight. The Commission published the average price across the EU for December at €518 per tonne. This aligns with producers’ comments indicating their average selling prices for this year are €510 basis bulk Northwest Europe.

From a financial standpoint, quarterly results will reflect the value of unsold inventory, which at €400 valuation will continue to depress financial reporting results.

Factory closures continue

Nordzucker announced the closure of its plant in Slovakia, where beet has become marginalized with only 178,000 tonnes of sugar being produced between the Nordzucker plant and Agrana’s operation. One cited reason for the closure was the impact of climate change making beet cultivation difficult, though Slovak beet growers found this reasoning strange in a year of record beet yields of 74 tonnes per hectare at 16% sucrose content.

It appears there are no buyers for sugar factories in the EU of any description, making permanent closure the only solution.



This newsarticle is part of a more comprehensive sugar market analysis. For the full sugar market analysis, visit: https://app.vespertool.com/market-analysis/2694