Frost could jeopardise EU sugar come back

Published: 05/09/2017, 1:17:25 PM

Efforts by farmers to bolster sugar output in the world's top beet producer before a new quota-free regime begins may be blown off course by the weather, according to Bloomberg.

Growers have been hoping to benefit from the end to a cap on European Union supplies from October. Tropical Research Services is among analysts forecasting output will rise by almost a fifth, led by top three producers France, Germany and Poland.

Those expectations are being undercut by freezing conditions in recent weeks that have damaged beet leaves, threatening plant growth, according to the Commodity Weather Group. If the effect continues into the summer, it could reduce the size of beets, according to David Streit, CWG's senior lead forecaster.

"For beets that were emerged, there would have been damage to the leaves which would require regrowth," Bethesda, Maryland-based Streit said by phone. "That would have been most likely in France and would have impacted the eastern third of the crop area."

Though outright crop losses will likely be limited as temperatures hovered mainly in the minus 2 to minus 3 degrees Celsius range (29-27 degrees Fahrenheit), a frost is forecast for Tuesday night in eastern Germany and southern Poland that may hurt growth, Streit said. CWG expects temperatures to be near or below normal this summer.

White-sugar prices have fallen 15% this year and reached a one-year low last week amid expectations of a global surplus and lower imports from top consumer India than previously anticipated. Increased European output, which TRS predicts may rise about 17% to almost 20 million metric tonnes in the season starting October, would add to the glut.

EU supplies may not be as plentiful as expected as the weather may hurt beets that have just been planted, Martin Todd, managing director of researcher LMC International Ltd., said in Geneva last month.

While it's too early to gauge any effect on production, the cold snap has been "not favorable" for Polish farmers, according to beet-growing lobby KZPBC.

"The low temperature slowed the growth of young beets," Rafal Strachota, director of Warsaw-based KZPBC, said by phone.

A prolonged lack of rain particularly in France, western Germany and the U.K. also threatens growth, according to MDA Weather Services. The main growing areas in northern and north-central France have been worst hit by rainfall that's been just 20 to 40% of normal levels in the past two months, Kenny Miller, a meteorologist at MDA in Gaithersburg, Maryland, said by phone. 

"I don't see any major improvement in precipitation in Europe over the next three weeks," Miller said. "As we head into June, we will probably be seeing the same issues we are seeing right now and that's definitely a red flag as we get into the beginning of the beet growth season."