Sugar, European production down 8% and record price increases (+18%)
Europe is again an importer and rising quotations are worrying the confectionery industry. Made in Italy holds its own in domestic consumption but covers only 15% of requirements
3' min read
3' min read
After two years of surplus the European Union is once again a net importer of sugar, a commodity that thus adds to the already long list of agri-food commodity deficits. With prices at their highest level this year, there is a risk of impacting the Italian confectionery industry, which absorbs 85% of production, rather than the final consumption of a product that is in any case cheap in absolute terms. The same percentage as the national deficit, at 85% and largely covered by France and Germany.
"Companies have already had to cope with the 'monstrous' increases in coffee and cocoa, central ingredients for many processes," emphasises the director general of Unione Italiana Food Mario Piccialuti, whose prices have been affected by the climatic conditions in the main producing countries, as well as trade and logistical tensions. Rising energy costs have further contributed to a more complex picture, particularly for the processing and distribution stages, with a greater impact on small and medium-sized enterprises. Although efforts are being made to absorb cost increases, concern about prices persists.
According to the European Commission's latest forecast EU sugar production in the new 2025-26 marketing year is expected to drop by 8% compared to last year, to 15.2 million tonnes. The reduction in sown areas by more than 10% would only be partially offset by a slight rebound in yields (+1%). With initial stocks down 6% from 2024-25 and consumption essentially stable (-0.4%) the EU is expected to return, after two years of net exports, to an importing area, with a 50% rebound in imports and a 17% fall in exports. From a surplus of about 1 million tonnes it would turn into a deficit of 0.4 million. The Commission report also underlines the risk of potential new downward revisions in yields due to drought and the danger of spreading aphid diseases especially in Germany.
Prices have reached their highest levels since 2024, with increases of 18.5% in June for the product delivered to Central-Northern Italy and 16.7% for the "spot" in Europe compared to December 2024 at EUR 700 per tonne. "The data published by the Commission confirm what we have been anticipating for some time now," explained Enrica Gentile, CEO of Areté, a consultancy company specialised in agribusiness. "The decline in sown areas, against substantially stable yields, is once again lifting sugar prices in Europe and widening the gap with world quotations, which are expected to fall slightly although still supported bylimited world stock levels. Energy prices also play a role in supporting EU quotations, albeit back to levels far from their 2022 peaks, but still well above pre-crisis prices, and the expected reduction in the share of zero tariffs imports from Ukraine.
In Italy, of the 19 factories operating before the 2006 European market reform that dismantled production, only two remain, in Minerbio (Bologna) and Pontelongo (Padua), of the Coprob group, a cooperative of 4,000 farms that produces under the Italia Zuccheri brand, purchasing and processing Italian beets.
