EU sugar area set to slump as factories take urgent steps to curb output

Suedzucker AG

14/01/2026 15:32

Refiles to fix formatting, add dropped word 'about' in paragraph 6

Area seen slumping around 7% to 8%, similar to last year's decline

Suedzucker asks for 15% to 35% area cuts, offers farmer compensation

Weak demand for the sweetener adds to glut

By May Angel and Michael Hogan

LONDON/HAMBURG, Jan 14 (Reuters) - EU farmers are expected to reduce the area planted with sugar beet in the world's third-largest sugar producer by around 7% to 8% this year as factories take urgent steps to curb production amid slumping prices.

Prices for sugar, a food staple present in most packaged foods, are around four-year lows on the European Union spot market, according to industry participants. World prices are SBc1 hovering near five-year lows, with the combination straining even the EU's larger factories as they lose money on domestic and export sales.

The drop in the EU beet area might help regional and world sugar prices recover as it should result in a decline in sugar production in the bloc and a more balanced global market in the 2026/27 season, industry experts say.

Late last year, Suedzucker SZUG.DE asked its German farmers to voluntarily reduce 2026 beet sowings by 15% to 35% after losses in its sugar unit more than doubled in its second quarter, according to the association of Bavarian sugar farmers.

Europe's largest sugar producer also offered German farmers who comply compensation of 10 euros for each metric ton of beet they harvest in 2026/27, the association said, adding that the company's French and Polish units had asked their farmers for 25% area reductions. Suedzucker declined to comment.

"Ten euros a ton is a third of the beet price. I've never heard of that happening," said Julian Price, former ED&F Man trader and consultant at julianprice.com. The current EU beet price is about 30 euros/t so the compensation offer is generous and shows Suedzucker's resolve to lower plantings, he said.

Some other EU sugar-makers are following suit.

The area planted with sugar beet in Poland should fall about 8% this year as sugar-makers have ordered less beet, Poland's sugar beet growers union said, while the Netherlands' Cosun has asked farmers to reduce plantings by 10%.

In top EU sugar grower France, however, the country's top two sugar-makers, Tereos [RIC:RIC:TEREO.UL] and Cristal Union have said they will keep the beet area steady this year, leading experts to pencil in 7% to 8% area declines in the EU overall.

The sugar beet area also slumped 7% to 8% in the EU last year, but the crop currently being harvested is only expected to dip slightly, thanks to improved yields and benign weather. Next season's prospects are different, however.

"Europe remains the tightest region in our 2026-27 outlook. Additional factory closures are possible," said Claudiu Covrig of consultancy CovrigAnalytics.

EU/UK sugar beet area vs EU reported price https://tmsnrt.rs/3NHJ7eR

EU + UK annual sugar production and consumption https://tmsnrt.rs/4qehU1S

EU vs World Sugar Market Prices https://tmsnrt.rs/4qmCygw

 (Reporting by May Angel and Michael Hogan. Additional reporting by Sybille de La Hamaide. Editing by Rod Nickel)

 ((may.angel@tr.com; Linkedin - http://bit.ly/4plR33W))