The sugar campaign of 2023/2024, which has just ended, proved to be record-breaking in many ways, with domestic producers producing over 2.34 million tonnes of sugar in total. The forthcoming season may turn out to be even better, but it is unlikely to impact price reductions, as sugar production has been under considerable cost pressure for some time now. – “Sugar prices will not fall. The question is only to what extent they will increase – whether moderately or more vigorously – and this will only be revealed next year”, says Michał Gawryszczak, Director of the Office of the Union of Sugar Producers in Poland.
– “The sugar industry closed this year with a fairly good result. We collected a lot of sugar beets which were processed into sugar. Unfortunately, polarization [the concentration of sugar in beet roots – amounted to just over 16 percent this season (editor’s note)] has failed. If the polarization was at a decent level with the amount of beets that have been processed, we would have been able to produce 2.5–2.7 million tonnes of sugar. But our result this year is 2.34 million tonnes of sugar, and of course it is not bad, but it could be better” – says Michał Gawryszczak.
The sugar campaign of 2023/2024 started at the end of August last year, and the end of sugar beet cutting took place on 4 February this year, in a sugar factory in Opalenica owned by Nordzucker Polska. The average campaign duration for all four national sugar producers was 134 days, significantly longer than last year – by 26 days. The yields of the campaign just ended averaged 63.86 tonnes per hectare, the best result in the last six years. Sugar producers signed contracts to cultivate and supply sugar beet with over 26,000 farmers, from whom they purchased almost 17 million tonnes of raw materials, a record result so far. In total, in the 2023/2024 campaign, domestic producers produced just over 2.34 million tonnes of sugar. This means an improvement of almost 30 thousand tonnes compared to the record year 2017/2018.
– “For the upcoming 2024/2025 season, producers have contracted the same or even higher levels of sugar beet, which could mean that there will probably be a little more sugar” – says the director of the ZPC office in Poland.
As he points out, however, it is unlikely to translate into a fall in sugar prices, as the cost of its production has risen sharply in recent seasons.
– “It is mainly about energy costs, which have risen dramatically following Russia’s aggression in Ukraine, and higher prices for plant protection products. The raw material in the form of sugar beet has also significantly increased in price, so sugar prices will probably not decrease. The question is only to what extent they will increase – whether moderately or more drastically. This will be revealed next year” – announces Michał Gawryszczak.
The Director of the office of the Union of Sugar Producers in Poland points out that the main problem facing the industry for some time now has been the withdrawal of successive active substances that make up plant protection products. The EU strategy “From farm to fork”, which is part of the European Green Deal, aims to reduce the use of plant protection products by 50% by 2030. That is why the European Commission is progressively withdrawing the active substances they contain.
– “Over the past years, we have lost 25 active substances, which significantly affects the yield of sugar beet and thus the amount of sugar produced” – says the director of the ZPC office in Poland. – “Another problem that has recently appeared is also Ukrainian sugar, which can enter the EU market in an unlimited and duty-free way.”
As ZPC informed in a November statement, since the temporary suspension of duties and quotas on the import of Ukrainian agricultural products the import of sugar from this country to the EU has increased sharply. In the 2022/2023 season, it was more than 400,000 tonnes, and forecasts for 2023/2024 predicted an increase to 600–700 thousand. These amounts, now entering the EU market, were previously exported from Ukraine to third countries.
– “This has a clear impact on prices on the European market and our country’s export possibilities. It’s not just about the sugar that physically ended up in Poland, because the numbers are not staggering, in both 2022 and 2023 it was about 34 thousand tonnes of sugar. However, it flows to other deficit countries, such as Romania or Italy. It not only lowers prices but also limits the export markets of our domestic producers, as buyers from Italy, for example, prefer to choose cheaper Ukrainian sugar than Polish” – says Michał Gawryszczak.
Poland produces annually about 600 thousand tonnes of sugar more than the domestic market can consume. The surplus goes to export, and the major recipients of Polish sugar are Germany, Britain, Israel and geographically close countries, which reduces transportation costs.
– “Regarding the competitiveness of our sugar, it is as competitive as any other – the quality is determined by European standards, so we can’t increase or decrease it much. We can only compete with the price of this sugar and the costs of transport. The level of service also counts, and our exporters impeccably fulfill the previously signed agreements” – says the expert.
