The European Commission forecast on Thursday that white sugar production in the EU would fall 3 percent in 2018/2019 to 20.4 million tonnes, after a nearly 25 percent rise the previous year when producers were encouraged by the end of quotas in the bloc. The Commission pointed to multi-year contracts between sugar beet producers and sugar makers as a reason for a relative stability in output despite a sharp fall in prices.
"In its first year without quotas, EU sugar production is at a high, and is expected to remain at this level in 2018/2019 despite low world and EU prices," the European Union's executive said in a report on agricultural markets.
The EU abolished limits on sugar beet production at the end of September 2017, which, according to the Commission, led to a 24 percent rise in output. The higher availabilities came at a time when appetite for sugar is declining and world stocks are already plentiful, reducing EU prices to their lowest level in records dating back to 2006, and leaving sugar companies fighting to survive in a fiercely competitive world market. The Commission pegged EU 2018/2019 white sugar exports at 3.3 million tonnes, up from 3.2 million tonnes in 2017/2018 and 1.3 million in 2016/2017.
"Exports over the first four months of the (2017/2018) marketing year reached almost 1.3 million tonnes, which is as much as the average annual EU exports over the last years," the Commission said in its report.
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