PARIS, Oct 17 (Reuters) - Cristal Union, France’s second-largest sugar group, sees the slump in the European sugar industry continuing in 2019 and possibly 2020 as prices take time to recover from historic lows, its chief executive told Le Figaro.
The sugar industry has been in turmoil since the European Union scrapped production and export quotas last year, which prompted many producers to boost output just when sugar prices collapsed under pressure from large world stocks.
“All of Europe’s sugar industry will be in the red this year, just like in Brazil,” Cristal Union Chief Executive Alain Commissaire told French daily Le Figaro in an interview, adding that it would be a first ever loss for his group.
“And the crisis will continue in 2019, and perhaps in 2020, because the rise in prices will be slow,” he said.
Germany’s Suedzucker, Europe’s largest sugar producer, cut its full-year earnings forecast last month, while rival Nordzucker said on Monday it expects to plunge into the red, both on expectations that sugar prices will not recover in the near term.
Raw sugar prices hit a 10-year low on Sept 27. They have gained more than 35 percent since then, and white sugar has risen 20 percent over the same period, but they are both still at very low levels.
Cristal Union in June scrapped a planned minimum price of 27 euros per tonne, saying it expected sugar prices to fall further this year.
On Tuesday it said would pay between 22 and 24 euros per tonne for the 13 million tonnes of sugar beet it will process this year. That volume will be down more than 20 percent from last year due to a severe drought in France.
Cristal Union was strong enough to withstand the industry slump since it had the backing of its banks and limited debt, Commissaire said, without giving details. (Reporting by Sybille de La Hamaide; Editing by Susan Fenton)