The European Union (EU) is expected to have a shortfall of 785,000 tonnes of sugar (white value) in the new season that starts in October as plants - many of which were converted back to oil from gas - started beet processing earlier than normal.
It is reported by Nasdaq.
According to a report by sugar market adviser CovrigAnalytics, the EU supply balance is swinging from a surplus of 670,000 tonnes in 2021/22 (Oct-Sept) due mostly to a fall in planted area and yields after a hot and dry summer.
The analyst said that many plants were successfully converted back to oil from natural gas, a change that is bad in terms of air pollution but necessary due to doubts regarding gas supplies in Europe, particularly Germany.
Therefore, CovrigAnalytics does not expect stoppages at beet sugar refineries in Europe which have started processing one or two weeks before normal to finish earlier and reduce energy demand in the peak of winter.
It estimates that 35%-38% of the EU industry is still dependent on natural gas.
The report projects an increase in sugar imports as a result of the supply deficit and sees potential for more imports of refined sugar than raw sugar as the first could be sold directly to consumers without the need of refining.
EU raw sugar imports would increase by only 100,000 tonnes to 920,000 tonnes in 2022/23. CovrigAnalytics expects Europe to buy more refined sugar later in the new season, around the second quarter of 2023, when Asian output increases (India, Thailand).