Cristal Union Of France Plans To Double Sugar Exports For 2024/25
French sugar producer Crystal Union plans to double exports next season to reduce an expected EU surplus. This surplus is expected to increase beet cultivation, driven by farmers attracted by high sugar prices, the coalition explained.
Like many of its peers, Crystal Union had a successful 2023/24 financial year thanks to higher sugar prices. But looking ahead, the cooperative group expects a 5% increase in the area planted by its members this year. This expansion, coupled with the planting of similar growth across Europe, carries the risk of falling prices. To counter this, Crystal Union is poised to significantly increase exports.
“In anticipation of a very good harvest, we are preparing for exports, especially to the Mediterranean region and West Africa. We have reserves and are preparing to balance the European domestic market,” said Stanislas Bouchard, vice president of Crystal Association General.
To support its export strategy, the company recently acquired additional storage facilities for 50,000 metric tons at the Port of Antwerp. This strategic move underscores Crystal Union’s proactive approach to managing excess cash flow expectations, and ensuring market stability in Europe.
Last year, Crystal Union’s exports exceeded 200,000 tons, though Bouchard declined to provide specific figures. These export volumes highlight the Group’s ability and readiness to increase export demand in the period ahead.
Terreos, another major company and the largest sugar producer in France, also recognizes the importance of exports in the market balance. Tereos CEO Olivier Leduc stressed that all European manufacturers need to support exports in the next period to stabilize the European market.
Movements in sugar prices in Europe have had an impact on margins in the group. But the prospect of a big harvest, coupled with an influx of Ukrainian imports and a sharp decline in the global sugar market, has pushed local prices down late last year. In April, the most recent government data showed that the average EU white sugar price fell by 3% by the end of 2023, with the price on the spot market at 831 euros per tonne around 700 euros per tonne, representing a significant 30% decrease from 1,000 euros per tonne a year ago.
The European Commission expects the sugar beet industry to grow by 2% annually in the segment of farmers who are keen to take advantage of rising sugar prices. This increase in planting is expected to contribute to the surplus funds and export options mentioned by Crystal Union.
Despite Crystal Union’s positive financial performance over the past year, a drop in sugar prices will weaken its results for the current year. The extent of the decline will depend largely on the weather and the likelihood of yellow fever damage, a factor that could affect beet yields and sugar production. Company president Olivier de Bohan said while the team hoped to overcome these challenges, it requires careful handling.
In Conclusion: Cristal Union Of France Plans
Crystal Union’s plan to double sugar exports in the next season is a strategic move that drives sugar prices higher amid the expected profits from greater beet farming. The company aims to balance the European market by acquiring additional warehouses and targeting key export markets such as the Mediterranean region and West Africa. Extensive industry growth with support from major manufacturers such as Tereos and improved sugarcane cultivation all highlight the need for efforts to manage integrated supply chains. While the past year has been economically rewarding, the upcoming season presents challenges as Crystal Union is poised to adopt export strategies and careful market management.