Tereos sees EU sugar output falling to 38-year low as severe weather hits beet crops

• Sugar beet yields expected to decline more than 20% compared to last year due to extreme weather conditions
• Tereos will reduce production campaign duration by 23% (from 130 days to 100 days average) across its eight French factories
• EU sugar output projected to hit lowest level in 38 years as severe weather impacts crop production across the region

Market Summary: EU Sugar Production Faces Historic Low

Key Development:

French sugar producer Tereos announced that extreme weather conditions will severely impact European Union sugar production, driving output to a 38-year low. The company expects sugar beet yields from its growers to decline by more than 20% compared to last year due to extreme heat and drought experienced this summer.

Operational Impact:

In response to the weather-damaged crop, Tereos will significantly curtail operations at its eight French factories. The sugar production campaign will be shortened to an average of 100 days, down from 130 days in the previous year—a 23% reduction in operating time.

Market Context:

This development represents a critical supply constraint for the European sugar market. The anticipated 38-year low in EU sugar output suggests the most severe production shortage since the mid-1980s, which could have significant implications for sugar prices and availability across the region.

Sector Implications:

The substantial yield reduction and shortened production timeline will likely result in:

• Reduced sugar supply across EU markets
• Potential upward pressure on sugar prices
• Possible increased import requirements to meet demand
• Impact on food and beverage manufacturers dependent on sugar supplies

Timeline:

The announcement was made on August 26, with effects on the current harvest and production cycle. The shortened campaign schedule is already being implemented across Tereos's French operations.

This weather-related crop failure underscores growing concerns about climate volatility's impact on agricultural commodities and food security in Europe.