EU Sugar Output is Risked by Frost

Europe sugar producers have been working especially hard lately, attempting to boost production before new tax regulations is put into effect. Now though, their efforts are threatened by the freezing weather that has damaged beet leaves over the past few weeks and threatens growth.

The region’s three top three producers – France, Germany and Poland – have all been affected, at least to some degree.

Weather forecasts are not leaving much room for optimism. While the impact on France could be mitigated, frost is expected in eastern Germany and south Poland, accelerating potential damages. According to some estimations, a shortage of rainfalls in Western Germany, UK and France, could also impact beet growth. However, it is too early to estimate the long-term impact on global supply.

Starting from October, there will no longer be a cap on European Union sugar supplies. Producers were hoping to benefit from the change, but now it’s unclear if production will meet expectations.

Following expectations of a global surplus and lower-than-predicted India imports, sugar prices have decreased over 21% [i] since the beginning of 2017, touching a one year low last week.

It is important to remember that other than major economic announcements, taxations and geopolitical changes, the weather also plays a role in trading – particularly when it comes to agricultural commodities and companies that rely on them. While you’re checking charts, news and financial data, don’t forget to keep an eye of weather forecasts. They might come in handy when you make your next trading decision.

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Any indication of past performance of a financial instrument is not a reliable indicator of current and/or future performance of such financial instrument.

Any indication of past performance of a financial instrument is not a reliable indicator of current and/or future performance of such financial instrument.

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