Südzucker expects sugar prices to rebound as lower harvests limit supply

By Tristan Veyet and Aleksandra Kret

Oct 8 (Reuters) - Europe's largest sugar producer Südzucker said on Thursday it expected sugar prices to rebound from their recent four-year lows as droughts and low rainfall take a toll on sugar beet harvests.

Südzucker CEO Niels Pörksen said lower harvests would be partly responsible for driving up sugar prices, while parts of the production would be directed to ethanol production instead of being refined to crystal sugar, further limiting supply.

"The world market is not flooded with sugar. The European market is undersupplied with sugar. So I can't see anything else than a further increase of sugar prices," Pörksen told Reuters after Südzucker published its results for the first half of the year.

In 2024, a total of 121.6 million metric tons of sugar beet was harvested in the European Union, according to Eurostat. Pörksen estimated that this year, harvests would be about 1 million tons lower in the European market.

The average EU white sugar price fell to €499 a ton in July, its lowest level since August 2022, European Commission data showed.

Earlier on Thursday, Südzucker reported broadly stable half-year sales at €4.19 billion ($4.69 billion), saying strong demand for biofuels partly offset lower revenue from sugar and starch products.

The company had pre-released first-half earnings and raised its full-year outlook in September, citing higher biofuel sales.

($1 = €0.8925)

(Reporting by Tristan Veyet and Aleksandra Kret in Gdansk, editing by Milla Nissi-Prussak)