Tereos sees EU sugar beet area falling by 9% next season

By May Angel

GENEVA (Reuters) -French group Tereos, one of the world's largest sugar makers, estimated on Wednesday a 9% decline in Europe's sugar beet planting acreage next season as slumping prices in the bloc take their toll.

Thanks to surging sugar exports from Ukraine, high output and falling consumption, European Union sugar prices dropped in February to 541 euros ($614.04) per metric ton, down 35% from a year ago and the lowest since September 2022, European Commission data show.

At S&P Global's sugar conference in Geneva, Tereos' Commercial Director David Souriau said the projected acreage decline is "major" for the sugar sector.

Other market participants projected more modest falls.

Nearly half of those polled at the conference said they see the EU sugar beet acreage falling by 5-8% in the upcoming 2025/26 season, which runs from October to September.

The EU is the world's third largest sugar producer so a reduced acreage likely means lower output, which could help stem the decline in global sugar prices that are near 2-1/2 year lows.

Souriau said he is also concerned about recent mill closures in France, the Czech Republic and Austria.

The closures tighten the market and give prices of the sweetener a chance to recover, but they could also lead to price volatility, which is difficult for the industry to manage.

"Capacity once closed can't be rebuilt instantly. These events pose questions about the risk of volatility and for me, that's a key aspect (of the market) for this year and for years to come," he said.

($1 = 0.8811 euros)

(Reporting by May Angel; Additional reporting by Sybille de la Hamaide, Editing by Louise Heavens and Richard Chang)