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A bitter downturn is sweeping Europe’s sugar industry as tumbling prices, soaring costs and regulatory pressures force factories to close and profits to melt away.
European sugar prices have slumped to their lowest level in three years because of surplus stock from increased Ukrainian exports, higher sugar beet production and lower sugar consumption.
“At current price levels, the market is simply not sustainable,” said Pierre-Henri Dietz, general manager of Cristalco, the commercial arm of major producer Cristal Union. “If prices don’t correct, we’ll see even more sugar factories closing across Europe.”
David Souriau, commercial director at France’s largest sugar group Tereos, said lower prices and rising costs related to climate, disease and regulation were “endangering the long-term viability of European sugar production”.
Sugar prices in Europe have dropped more than a third since last summer to €536 a tonne in June, according to the latest data from the European Commission.
Speculative traders have amassed their largest net short position in New York sugar futures since 2019 — the biggest collective bet in years that prices will fall, according to Commodity Futures Trading Commission data.
Tereos reported in August that revenues in the three months to the end of June were down 25 per cent year-on-year earlier to €1.2bn, while earnings before interest, tax, depreciation and amortisation dropped 79 per cent to €56mn.
It reported a recurring operating loss of €22mn and net debt rose to €2.265bn but the group maintained its full-year guidance.
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Germany’s Südzucker, Europe’s largest sugar producer, reported in July an 85 per cent fall in operating profit to €22mn for its first quarter to the end of May, with its sugar division swinging to a €56mn operating loss.
The group expects a full-year loss of up to €200mn in its sugar division, although it is forecasting a price rebound in the second half of the year.
Cristal Union, France’s second-largest producer this summer reported a 62 per cent drop in net profit to €117mn for the 2024-25 financial year and warned of “much more unfavourable market conditions” ahead.
The downturn has already forced the closure of five sugar factories in Europe this year, adding to the 14 closures in the UK between 2010 and 2025 and cutting the number of operating plants to 83.
As farmers facing lower prices weigh the risk of selling at a loss, the number of acres planted with beet is expected to decrease by nearly 10 per cent this season.
“We’re already seeing beet areas shrink sharply,” said Stanislas Bouchard, deputy general manager of Cristal Union. “That’s going to have consequences for production.”
While Tereos has kept its planting stable, the group said production costs had surged. The average cost of making sugar in Europe has increased by €200 per tonne since 2017, according to the company, driven by rising farm inputs, energy prices and climate-related risks.
Souriau also blamed some of the sector’s struggles on European policies that “hold the bloc’s producers to tougher environmental standards than foreign competitors” who benefit from tariff-free access. This has “severely undermined European competitiveness”, he said.
“Today there is a very strong misalignment between the EU’s environmental policies and its trade policy, which continuously increases imports of sugar, alcohol, and ethanol without tariffs from countries that do not apply the same environmental regulations.”
Ukrainian imports have been particularly damaging, according to Dietz.
More than 1mn tonnes of sugar from the war-torn country entered the EU in 2023 and 2024, pushing up stock levels and dragging down prices. Brussels agreed to slash Ukrainian import quotas by 80 per cent from July.
Despite a recent slump in sugar demand, Dietz played down concerns about long-term risks linked to changing consumption patterns as a result of the new wave of weight loss drugs such as Ozempic and Mounjaro. “Ten years ago, the big worry was glucose substitutes — and that hasn’t come to fruition,” he said.
“The bigger factor for us is cocoa. About 30 per cent of our sales are tied to the cocoa market, so a downturn in chocolate demand can hit sugar sales.”
