September 7, 2017 / 10:46 AM / a year ago

Germany set for big sugar crop in deregulated EU market

HAMBURG, Sept 7 (Reuters) - Germany is set to significantly increase its sugar production after farmers expanded beet sowings for the autumn harvest ahead of deregulation of the EU market from next month, an industry official said.

German farmers have increased beet sowings by about 22 percent from last year to around 385,000 hectares for this autumn’s harvest as the EU ends restrictions on sugar cultivation, the head of Germany’s sugar industry association WVZ, Guenter Tissen, said on Thursday.

Germany is likely to increase its production of refined sugar in the 2017/18 season by 23 percent on last year to 4.98 million tonnes if harvesting is not disrupted by bad weather, Tissen said.

“The expansion of the area sown with beet was undertaken because of the upcoming end of the EU sugar quota regulations on Oct. 1 this year,” Tissen said. “The removal of the previous upper limit on domestic beet cultivation means imports can be substituted by German-produced sugar beet.”

The European Union is introducing a radical liberalisation of the sugar market from Sept. 30, with farmers free to grow as much as they want and refiners able to sell sugar globally after decades of strict output quotas and export limits.

Leading German sugar producers Suedzucker and Nordzucker have said they plan to expand in the deregulated EU sugar market.

Along with food, sugar also has extensive non-food industrial use including for fermentation, bioethanol production and in chemicals. EU deregulation will also permit more European sugar exports into the global market.

“Germany’s sugar industry and beet growers plan to make use of the new opportunities the market liberalisation will give,” Tissen said. “But they still insist on a level playing field on the sugar market.”

“There should be no market distortions by the international big players like Brazil and Thailand. We also need the end of coupled support in Europe as soon as possible,” he said.

EU member states have the option of providing financial help, called Voluntary Coupled Support, to help farming sectors in difficulties, including sugar beet producers. Some 10 member states have decided to provide financial aid to their sugar producers under this scheme.

German sugar beet harvesting began in recent days and this season’s production should be completed in January if weather remains positive, Tissen said.

WVZ estimates Germany will harvest about 31.48 million tonnes of beet against about 24.8 million tonnes last season. Beet sugar content is initially estimated at 17.78 percent, unchanged from last year.

“The condition of beet crops differs regionally,” Tissen said. “The varied picture in Germany ranges from individual regions with floods to isolated areas with drought.” (Reporting by Michael Hogan, editing by Susan Fenton)

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