November 24, 2017 / 3:07 PM / 2 years ago

EU set for large sugar crop as liberalised market starts

* Big sugar crops in Germany, France, UK, Poland

* EU restrictions on sugar beet sowing ended

* More EU sugar for export expected

HAMBURG, Nov 24 (Reuters) - The European Union is set for a large sugar beet crop this winter, the first harvest in the bloc’s newly deregulated sugar market, industry experts said on Friday.

From October, EU farmers became free to grow as much sugar beet as they want and refiners allowed to export sugar globally after decades of restrictive EU output quotas and export limits.

Guaranteed prices were also scrapped as part of a liberalisation of the EU’s last remaining agricultural quota system.

The experts said many farmers have made use of their new freedom to expand output, so that increased sugar output is expected in major producers France, Germany, Britain and Poland, making more supplies available for export on world markets.

The European Commission forecasts the bloc will produce 20.1 million tonnes of sugar in 2017/18, up nearly 20 percent from 16.8 million last season.

Top producer France is set for a surge in sugar production in the 2017/18 season, as strong yields in the sugar beet harvest follow increased plantings.

French sugar production could reach almost 6 million tonnes, up over 25 percent from last season, growers group CGB said.

“We’re seeing good yields that are above average,” said Timothe Masson of the CGB. “Weather conditions have been favourable.”

The CGB expects France to harvest 44 million tonnes of sugar beet, up from around 34 million last season.

French sugar processors are extending their annual production run to handle the increased harvest.

In second largest producer Germany, sugar production should reach around 5 million tonnes, up about 24 percent on last season, Guenter Tissen, CEO of German sugar industry association WVZ, said.

“Progress with Germany’s harvest is up to now satisfactory but rain has made it difficult to dig up some beets,” Tissen said.

Some of Germany’s large crop could be exported outside Europe.

“In the liberalised sugar market, exports without the previous WTO (World Trade Organisation) restrictions will play an increasing role in marketing,” said Tissen. “This year’s harvest has created opportunities for exports.”

“Simultaneously, sales in Europe’s domestic market can certainly be expanded, as the previous EU sugar production quota only covered 85 percent of Europe’s food sugar needs.”

In the third largest producer Poland, sugar production should reach 2.1-2.2 million from 2.08 million tonnes last season, Rafal Strachota, director of Polish sugar beet growers’ association KZPBC, said.

“We are facing difficulties with harvesting due to rainy weather,” Strachota said.” In most parts of Poland rainfall, water on the fields, extreme wet soil cause that harvesters cannot enter fields according to schedule.”

In Britain, the fourth largest producer, sugar production is expected to rise by over 50 percent this season following a sharp increase in sowings and favourable weather during the growing season.

“We are positive about this year’s crop, with the current campaign progressing very well,” said Colm McKay, agricultural director of producer British Sugar. “Our latest sugar production estimate for 2017/18 remains at approximately 1.4 million tonnes.”

Britain’s sugar production in 2016/17 totalled only 900,000 tonnes. (Reporting by Michael Hogan, Gus Trompiz and Nigel Hunt, editing by Jane Merriman)

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