The European Commission's crop monitoring unit MARS said in its October bulletin Monday that it had revised its sugar beet yield forecast for Europe down to 72.7 mt a hectare from 73.3 mt/ha in its August bulletin.
The latest forecast was 2.8% below the five-year average of 74.9 mt/ha. MARS also revised France's sugar beet yield forecast down to 85.5 mt/ha, from 87.5 mt/ha in its September bulletin, 4.6% below the five-year average and 10% down on the year. These revisions are due to a rainfall deficit continuing through September and October, following the dry, hot weather in the sugar beet growing belt of Europe throughout June and July.
This announcement followed production updates in Germany last week; the national sugar industry association (WVZ) estimated sugar production for 2018-19 at 4.412 million mt, down from 4.467 million mt in its September forecast and 5.161 million mt in 2017-18.
This brings the sugar yield for the 2018-19 campaign to 11.26 mt/ha, down from 13.51 mt/ha last season. Secondly, the last beet test of the year conducted by seed producer Strube across Germany on October 8, showed an average beet yield of 75.5 mt/ha, a sharp drop from 102.4 mt/ha a year earlier and below the five-year average of 89.9 mt/ha.
Surprisingly, according to many sources, European domestic delivered prices have remained static throughout September and October and have yet to react to lower European production. Sources say this is related to high stocks in Europe. Latest figures from the European Commission put EU stocks at 5.757 million mt at the end of July, more than double the 2.835 million mt a year earlier.
However over the last week, market sentiment did seem to have changed, a source said. This was supported by a French broker who said that it is more a case of "when than if" domestic prices in Europe see some support. With the London No.5 white sugar contract passing parity with EU domestic prices for the first time in over four months, this could perhaps drag up domestic prices, as it is no longer more attractive to sell to the domestic market, which had been the case until the recent world sugar price rally.
