Tight supply drives EU sugar prices up 80% on the year

Tight supplies of sugar, both in the UK and on the Continent, are driving up prices, with UK sugar production estimated by the NFU to be about 350,000t below last year’s levels.

Total sugar supply is forecast to be 200,000t below 2021-22 levels, despite an increase in import volumes year-on-year.

Meanwhile, in the EU, the average price of white sugar was up 80% in June 2023 on the same month last year, to average €817/t (£702/t).

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NFU Sugar commercial and market insight manager Arthur Marshall said: “With the vast majority of sugar in Europe sold on contracts at prices agreed pre-campaign or prior to the start of the calendar year, this is not surprising, but nonetheless underlines the exceptionally high price level in the market.”

Average prices of white sugar imported into the UK had increased in line with EU average prices, he said, and these higher imported prices were helping to support domestic prices for UK-produced sugar.

Global sugar deficit

The NFU has reported anecdotally some UK sugar sales in the region of £860/t for 2023-24.

There is a current global deficit for sugar of about 1m tonnes, according to NFU Sugar board appointee and sugar trader Paul Harper.

“The raw sugar market has been treading water, while the white sugar market has held steady following continued strong demand,” he said.

If white sugar premiums remain high, as expected, Mr Harper said there could be more demand for raw sugar from refineries, which would support prices further.