Sugar
Sugar
The planting of the beats for the new season is almost completely finished, as usual in the months of March and April. On average there has been a decrease in Europe of -4% planted surface.
The weather conditions have been rather dry and on average there has been 25% less rain then on average. For that reason the prediction is that the sugar yield in the new crop will be below the 5 year average and this in combination with the smaller planted surface the total sugar production for crop 2020/2021 is predicted to be smaller than the 5 year average.
However, the impact on demand of the Corona-crisis is uncertain for the moment. In the beginning of the crisis there was still a big demand for sugar but the last couple of weeks, this demand dropped significantly as well. How this will further evolve is highly uncertain.
Regarding the world market prices: there are plenty more considerations to be taken into account (changing ethanol / sugar parities on other countries like EU, lack of competitiveness of world market relative to domestic market for various exporters, cane and beet acreage and yields likely to go down because of lower returns in absolute value and relative to other crops). Prices on the world market dropped but as always, the evolution on the world market is not always 1-on-1 correlated with the price in Europe.
Concluding: probably there will be enough sugar until the end of the season and it is now too early to say what prices for new crop will be.