French Sugar Beet Crop Set to Drop to 14-Year Low Following EU Pesticide Ban

Sugar Beet

Vegetables

Published Mar 31, 2023

In Jan-23, the EU rejected a pesticide ban exemption placed by the French government sugar beet growers due to the pesticide's potential risk to bees, putting the current crop at risk of infection and damage. This could result in crop damage and significantly impact sugar production in France. Initial estimates placed the 2022/23 sugar crop resulting from sugar beets at 3.6 million mt, down from 3.9 million mt the previous year due to severe drought during the summer months. However, the EU pesticide ban could shrink sugar production to lower than 3.5 million mt.

In 2020, the French government granted sugar beet growers a 3 year exemption regarding the usage of banned neonicotinoid pesticides, and 2023 would have been the third and final year of the exemption. The exemption was aimed at protecting sugar beet crops from a disease known as virus yellows, which decimated 30% of the 2020 harvest while allowing the sector ample time to develop crop-protection strategies. However, in Jan-23, the EU rejected this exemption due to the pesticide's potential risk to bees, putting the current crop at risk of infection and damage.

Sugar beet farmers in France remain concerned about potential crop damage resulting from the pesticide restrictions resulting in varied reactions from growers. On one hand, many sugar beet farmers in France have decided to shift focus from sugar beets to alternate crops, leading to an even steeper fall in sugar beet planted area. On the other hand, some growers have decided to reduce their seed purchasing, thereby decreasing the sugar beet planted area by 6% to 378K hectares in 2023, compared to the 402K hectares planted in 2022. This would result in the smallest sugar beet planted area in France since 2009 and a sixth consecutive fall in planted area.

A potential loss in the sugar beet planted area could significantly impact sugar production in France. Initial estimates placed the 2022/23 sugar crop resulting from sugar beets at 3.6 million mt, down from 3.9 million mt the previous year due to severe drought during the summer months. However, the EU pesticide ban could shrink sugar production to lower than 3.5 million mt, according to Tridge's estimates.

Source: Tridge, European Association of Sugar Manufacturers

As a result, sugar beet purchase prices have increased since the EU ruling on Jan-23. Cristal Union, a French sugar cooperative with 9,000 members, witnessed its sugar beet purchase price in 2023 increase to Є45 per mt, a 12.5% increase compared to Є40 per mt in 2022. Sugar prices have also surged in the EU in recent months. According to the European Commission, the average price EU sugar price rose to Є655 per mt in Dec-22, up 56% YoY. This increase in prices could give sugar beet farmers an incentive to plant more beets, thereby cushioning the potential drop in the planted area.

Tridge expects that French sugar beet exports to key markets such as Italy, the Netherlands, and Japan will fall this year. Italy, in particular, consumes over 53% of France's sugar beets, and the European country may opt to source the product from competitors such as Egypt and India, unaffected by the EU's pesticide ban. Egypt may be the biggest beneficiary of the situation in France, given that India, the leading beet sugar exporter in the world and Egypt's main competitor, is expecting a reduced crop this year based on Tridge's analysis.

France continues to look for crop-protection strategies to tackle the threat of the virus yellows disease, which would remove the need to utilise the neonicotinoid chemicals banned by the EU. In the meantime, Tridge expects sugar prices to remain on an upward trend for the coming months as the market reacts to the low supply of sugar beets. (Tridge price data available here)