皇家华人

European beet area in 2024 is now expected to be up by around 4-6% year-on-year, as sugar prices (and hence anticipated beet returns) have continued to incentivise more area in virtually all countries.

As a result, the market is reported to be expecting greater sugar production compared to 2023/24, though still anticipating Europe being a net importer. However, late drilling and high Virus Yellows risk could weigh on 2024 beet yields despite the higher area.

Feedback from growers suggests that as of the first week in April, around 10% of the UK crop at most had been drilled, with three quarters of growers telling us they had not yet planted anything. This reflects a similar 鈥� possibly even more delayed 鈥� situation across much of the European beet belt, with our counterpart grower associations in many countries recording planting progress well below 10% as of the start of April.

Regardless of weather and progress in the coming weeks, this means this year鈥檚 average drilling date will be later than the UK 10-year average of 4 April. Typically, planting is marginally ahead of the UK in areas further south, such as France, suggesting that progress could be even further behind normal in other parts of the beet belt.

It is far too early to draw any conclusions on 2024 beet yields this far out, with summer and autumn weather very influential on the final crop outcome. However, there are various factors at this point expected to weigh on yield potential, both here and elsewhere in Europe:

1. Late planting tends to limit the best-case yield

As shown in Figure 1, there is not much correlation between the average planting date and yield on a national scale.

However, the pattern of the past 10 years does suggest late drilling limits the best-case yield the crop could achieve, as highlighted by the green dashed line.

The BBRO (British Beet Research Organisation) quotes an average yield loss of up to 4t/ha for every week drilling is delayed past mid-April. If the majority of the crop remains to be drilled by mid-April, as the feedback to NFU Sugar suggests is likely, it implies that even in the best-case scenario, where the remainder of the season is favourable, a yield above 80t/ha is unlikely in 2024.

Drill in the right conditions

It is important to remember that even when drilling is late, BBRO advice is to drill in the right conditions, not to target a date. .

2. Virus Yellows risk is almost as high as 2020

At 83%, the forecast incidence of Virus Yellows in the UK in the absence of any pest control is very similar to the incidence forecast in 2020 when average UK yields were over 25% below average and some individuals lost up to 80% of their expected production.

Anticipated Virus Yellows pressure is also very high elsewhere in Europe, including France which faced similar yield losses to the UK in 2020. With 40% of the UK crop, as well the entire crop the other side of the channel, unprotected by Cruiser SB seed treatment, growers are on high alert for the risk of significant Virus Yellows infection rates to impact yields.

3. 2023 beet crops remain a potential host for aphids

The Virus Yellows infection risk is exacerbated in the UK by the very late running of the 2023/24 campaign, expected to last until mid-April. Crops still on farm in the spring, particularly when sending out fresh growth, create a green bridge which can host aphids which then migrate into newly emerging 2024 crops.

A trader鈥檚 view

NFU Sugar Board appointee and sugar trader Paul Harper shares his thoughts on the current market situation.

The market may well continue in a similar vein until the picture becomes clearer on production numbers for the coming year. Producers appear not to be keen to hedge at the lower end of the range whilst demand declines at the higher end.

Speculators continue to look for the next move and currently sit around 40k lots long in New York raw sugar futures having been neutral at the time of the last review.

There has been discussion around that suggests the bull market that sugar has experienced over the last four years may be coming to an end as production catches up and maybe exceeds demand as we move into 2025. Time will tell if this is the case and the market is currently more than $100/t below the highs seen in 2023, so it is likely that we will see more volatility over the coming months.

The 2024 futures-linked beet price which traded down to around 拢33/t a month or so ago, currently sits at around 拢36/t (at the time of writing).

The WABCG view: waiting for news from Brazil

Taken from the World Association of Beet and Cane Growers鈥� Flashmarket newsletter on 3 April, by Timoth茅 Masson, Executive Secretary of WABCG and economist for the French beet growers association, CGB.

March was very similar to February for the sugar market. Analysts鈥� views on the fundamentals remained unclear, although globally they are now expecting a disappointing campaign in Brazil (which will open next month). Speculators slowly came back into the game and ended the month as net buyers of 1.2Mt, pushing sugar up 5% for the month.

But it is clear that, even for the current campaign (October 2023 to September 2024), views differ according to source. ISO is still forecasting a small deficit (-0.6 Mt, published end-February), but Sucden is forecasting a small surplus (+0.2 Mt, published end-February) as is Global Data (+0.6 Mt, published mid-March). Others are starting to anticipate a large surplus, such as Czarnikow (+3.5 Mt, published 14 March) or S&P (+5.2 Mt, published 20 March). Why is it so difficult to forecast the current campaign?

Well, it is mainly because of Brazil and the first results of the campaign, mid-April, will be heavily analysed. The analysts at Global Data are probably the most honest: 鈥淭he reality is that there is a lot that we do not yet know鈥�. Thus, depending on what is estimated in terms of yields (which are likely to be disappointing, especially in the second half of the campaign), but also in terms of the sugar/ethanol mix, Brazilian production could be 38Mt鈥� or 43Mt.

The other news we heard this month came from China. Statistics for January and February are available and show that the country imported 1.2Mt during these months. It is 35% more than last year.

This can be linked to the country鈥檚 stock levels, which were previously thought to be at their lowest. But this figure suggests that, although sugar is not cheap, demand remains strong by (at least some) buyers: does this means that global demand may have been underestimated?

Currencies were flat globally, corn and soya value increased (but not wheat), ethanol gained 4% (good news before the start of the campaign!). Freight was flat globally.