France's Ouvre becomes latest sugar maker to halt output

Suedzucker AG

14/01/2025 15:22

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      Cristal Union to process Ouvre's sugar beets from 2024/25
    

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      Unclear if Ouvre will resume production
    

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      Lower sugar prices have sapped producers' profits
    

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      Saint Louis Sucre (Suedzucker) asked farmers to cut
plantings
    

  
    By Sybille de La Hamaide
       PARIS, Jan 13 (Reuters) - Sugar-maker Ouvre has halted
operations due to technical and financial problems and asked
farmers to sell their beets to larger producer Cristal Union,
letters seen by Reuters showed, marking the sixth French sugar
plant closure in as many years.
    France is the European Union's largest sugar producer but a
series of poor harvests, caused by adverse weather and diseases,
has deterred some farmers from growing beets, cutting supplies
for sugar makers. More recently a fall in sugar prices has hit
profits.
    Family-owned Ouvre, which operates one sugar plant located
in Souppes-sur-Loing, south of Paris, with an output of about
60,000 metric tons of sugar per year, said in a letter on Friday
that unspecified technical problems and damage had forced it to
halt production early in the season.
    It has asked Cristal Union, France's second largest producer
that has several sugar refineries in the region, to process the
sugar beet harvested by its members in 2024/25. 
    "Today we have to accept it: a restart of the sugar factory
cannot reasonably be assured at this time," Ouvre said in its
letter to farmers, adding that it had reached a deal with
Cristal Union for the upcoming campaign.
    Cristal Union said in a separate letter to its cooperative
members that the deal would allow Ouvre farmers to deliver their
sugar beets for processing "from the 2025 campaign onwards".
    An industry source, speaking on condition of anonymity, said
the plant was unlikely to resume after two years without
production. 
    Ouvre did not immediately respond to a request to comment
and Cristal Union declined to comment.
        
    SLUMP IN PRICES
    The Ouvre stoppage coincides with an expected reduction in
sugar output across France over the coming season and a fall in
sugar prices.
    European sugar prices dropped 30% in the year to November to
hit a two-year low of 599 euros per ton, according to the latest
available data. Global sugar prices  LSUc1  traded near
three-year lows on Tuesday.
    Saint-Louis Sucre, the French branch of Europe's largest
sugar maker Suedzucker  SZUG.DE , told its members on Dec. 24 it
would reduce the area for the 2025 harvest by 15% due to lower
European sugar prices and high Ukrainian imports.
    It was unclear whether Ouvre's plant would reopen after the
2025/26 season. 
    A permanent closure would bring the number of sugar
factories in France to 19 from 25 at the end of last decade.
Saint Louis Sucre and Cristal Union have both shut two and
Tereos has shut one.
    The overall impact on France's sugar output - about 4
million tons per year - is likely to be minimal as most farmers
are expected to deliver their beets to Cristal Union or Tereos,
which is also courting Ouvre's growers.

 (Reporting by Sybille de La Hamaide; editing by Barbara Lewis)
 ((mailto:Sybille.deLaHamaide@thomsonreuters.com; +336 8774
4148;))