S&P Global Energy: European summer drought reduces beet output, EU sugar production may fall to lowest level in over a decade in the 2026/27 crushing season

Due to the dual impact of summer droughts severely affecting beet crops and a reduction in planting area earlier in the year, sugar prices in Europe have surged to nearly a one-year high. According to Platts Energy Information, a division of S&P Global Commodity Insights, on September 3, the domestic sugar price in Northwest Europe reached 550 euros per ton, an increase of nearly 40% since the beginning of the year. S&P Global forecasts that during the 2026/27 crushing season, sugar production in the EU and the UK will drop by 18.5% year-on-year to 14.3 million tons, the lowest in more than a decade, and predicts that sugar prices in Northwest Europe may further climb to around 600 euros per ton in the fourth quarter. On a global scale, India, facing tightening domestic supply, has shifted to imports. Combined with El Niño concerns causing worries over reduced production in Asia, it is expected that a supply shortage will occur in the global sugar market during the 2026/27 crushing season. George Weston, CEO of Associated British Foods, stated that Europe will see a significant gap in sugar production, and the outlook for sugar prices remains positive. However, since most sugar is sold through forward contracts and faces factors such as rising energy costs and declining output in Africa, the realization of producers' earnings may be delayed.