Tereos raises beet prices by 40% amid soaring EU sugar markets

PARIS, Oct 19 (Reuters) – France’s biggest sugar and ethanol group Tereos has raised the price at which it will buy sugar beet from its cooperative members by 40% year-on-year to announce improved results amid surging European sugar markets.

In a letter sent Tuesday to its 12,000 cooperative members, Tereos said it would pay 41.85 euros ($40.88) per tonne of sugar beet for the 2022 crop, based on 16-degree sugar levels, up from 29.90 Euro last season.

The price hike is solely linked to improved industrial and commercial performances by Tereos’ French sugar division, she said, adding that it had seen a significant increase in its average selling price compared to 2021.

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Tereos had previously said it would do “at least as much” as its rivals in France. Cristal Union and the French subsidiary of Südzucker (SZUG.DE), Saint-Louis Sucre, announced prices of EUR 35 and EUR 35.50 per ton respectively.

The sugar beet growers’ union CGB welcomed Tereos’ move and urged other sugar producers in France to consider raising their purchase prices.

“This announcement is timely as yields for the 2022 crop are expected to fall sharply compared to the five-year average and beet production costs are seeing record inflation, particularly driven by fuel and fertilizer prices: nearly 15% in 2022 and 35% that expected in 2023 compared to 2021 levels,” CGB said in a statement.

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European sugar prices are trading at record highs, almost three times higher than a year ago, after extreme weather conditions and rising energy costs prompted concerns in the baking and confectionery industries.

The sugar beet harvest, which is in full swing in France, is showing disappointing results after a severe drought hampered crop development. The Agriculture Department said earlier this month it expects the national yield to fall 6% compared to the five-year average.

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Tereos said it expects yields to be close to the five-year average, albeit with mixed results, and to record an average sugar content of 18.2%.

Tereos is the second largest sugar producer in the world by volume thanks to its sugar cane operations in Brazil.

($1 = 1.0238 euros)

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Reporting by Sybille de La Hamaide; Adaptation by Paul Simao and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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