European sugar prices have declined sharply in recent weeks, with ex-factory beet belt values now trading at €450 on a bulk basis, as the market adjusts following significant falls in New York #11 sugar futures. The price movement has caught both buyers and sellers somewhat by surprise, with companies not rushing to secure positions despite the lower values.
Current market values show ex-works beet belt at €450 traded and bid with €460 offered, while Polish sugar stands at €425 on a bulk basis. Delivered prices show North Italy bulk at €525, DDP UK at €555, and DDP Austria at €505, all on a bulk basis.
The decline brings European sugar prices close to a critical threshold. Export parity currently sits around €335 ex-factory, and at present price levels, producers would need to offer beet prices between €30 and €33 just to break even next year. These margins could drive growers to shift acreage to alternative crops such as wheat, potentially reducing sugar beet cultivation across the region.
The financial pressure on sugar producers is visible in bond markets. As of October 31st, Tereos bonds showed volatility with a yield to maturity of 6.51% and coupon price at 95.5, while Südzucker demonstrated greater stability with a yield to maturity of 3.62%. The divergence reflects market concerns about how falling sugar prices will impact company finances.
Industry observers note that continued pressure at current price levels could trigger additional factory closures and further area reductions beyond those already announced. While buyers may see current prices as attractive compared to 2026-2027 forward values, the structural implications could ultimately limit buyer choice as European production capacity contracts.
The situation presents a challenge not only for producers but for the broader supply chain. At current price levels, procurement managers face a decision between securing volume at favorable prices today while considering potential supply constraints in future years.
Despite the price pressure, the 2025 campaign is progressing well across the beet belt. EU average yields stand marginally higher at 76.3 tonnes versus 75.7 tonnes in 2024, though these figures represent a pure average rather than weighted by major producing countries. In the Netherlands, Cosun reports sucrose levels remain steady at 17.3°, while France shows yields 5% higher year-on-year.
This news article is part of a more comprehensive sugar market analysis. For the full market analysis, visit: https://app.vespertool.com/market-analysis/2411
