AB Sugar sees 2019-20 UK sugar output up 3,000 mt on the year at 1.18 mil mt

London — British Sugar owner AB Sugar said Monday that higher beet yields would offset a drop in planted area in the UK and take 2019-20 (October-September) sugar production 3,000 mt higher on the year to 1.18 million mt.

S&P Global Platts Analytics forecasts total 2019-20 EU sugar production will be down 428,000 mt on the year at 17.502 million mt as a result of dry conditions early in the season and heavy rainfall late in the season, meaning beet yields did not offset a reduced planted area in the main producing countries of France and Germany. However, in the UK, AB Sugar said the campaign was "entering its final stages and is progressing well."

The company, a unit of Associated British Foods, reported that in Spain, its beet sugar production "will be lower than last year at 210,000 mt" due to a lower area planted to beet in Northern regions but that this would be compensated for by an increase in the amount of raw-sugar refining.

AB Sugar said in the update that its "UK and Spanish businesses have now largely completed contracting sales for this financial year," and added that European prices "have remained at levels significantly higher than last year," whilst the "recent increase in the world market sugar price should provide further support to EU prices in the medium term."

Western European spot delivered sugar prices are now Eur152/mt higher than the all-time lows of May 2018, assessed Friday at Eur464/mt. S&P Global Platts assessed Spanish delivered sugar price unchanged on the week at Eur535/mt Friday, remaining at its highest since August 2018.

Looking beyond Europe, AB Sugar said sugar production at Illovo, its African operations, is "expected to be some 1.7 million mt, broadly in line with last year, with production being limited by heavy rains."

In China, the company forecast its sugar production would be 24,000 mt lower on the year at 125,000 mt, but a better-quality beet crop, and a new payment system, "linking of some grower payments to the sugar content of their beet," is expected to deliver a reduced operating loss.