Suedzucker expects to raise its sugar prices again next year

By Maytaal Angel

LONDON (Reuters) -Europe’s largest sugar producer Suedzucker is set to bump up sugar prices again next year as energy costs remain high and input costs for items like sugar beet are also elevated, chief executive Niels Poerksen told Reuters.

The news of further price rises for a widely-used food staple like sugar comes as European policymakers scramble to try control inflation and curb a cost of living crisis.

“In some areas, increased costs are still putting pressure on the margin. We will therefore have to implement further price increases next year,” Poerksen said on the sidelines of an International Sugar Organisation seminar in London, referring to sugar prices and also to processed foods like pizza and ‘functional’ or health food ingredients like isomalt.

EU sugar prices on the spot market are already at record high levels – nearly three times those seen a year ago – following extreme weather and a surge in energy costs, forcing confectioners to consider production cuts.

Sugar production is among the most energy-intensive industries and is especially reliant in the European Union on gas, prices of which have soared this year as key producer Russia has sharply restricted supply.

Earlier this month, Suedzucker, which has a range of non-food interests including biofuels, said it expected profits for the year to end-February 2023 would be nearly twice as high as a year ago as higher sugar prices would compensate for rising energy and raw materials costs.

Poerksen said sugar consumption had recovered to pre-COVID levels despite efforts to reduce use of the sweetener in foods on health grounds. He added there are many other uses for sugar, like ethanol.

In terms of supply, Poerksen doesn’t expect higher prices for sugar-beet to result in much higher plantings next year because farmers are limited by crop rotation constraints.

The sugar beet area for this winter’s crop is down by about 4% on the year, according to Suedzucker.

(Reporting by Maytaal Angel. Editing by Jane Merriman and Mark Potter)

Brazil announces more names for govt transition in environment, agriculture

BRASILIA (Reuters) – Brazil’s Vice President-elect Geraldo Alckmin, who is coordinating the government transition process on behalf of President-elect Luiz Inacio Lula da Silva, announced on Wednesday more names for the team in areas including agriculture and environment.

As speculation mounts on who Lula will choose to form his cabinet, three former ministers in previous administrations of his Workers’ Party were announced for the environment group. Three other former ministers close to rural producers were tapped for the agriculture group.

While Lula attends the COP27 climate summit in Egypt, his first overseas trip since defeating far-right incumbent Jair Bolsonaro in October, Alckmin announced that former environment ministers Marina Silva, Izabella Teixeira and Carlos Minc would participate in the transition process.

Silva and Teixeira are with Lula at COP27, where the president-elect seeks to deliver a message that “Brazil is back” in the fight against global warming.

As Lula also looks to re-build connections with agribusiness, a key constituency for Bolsonaro in his unsuccessful re-election bid, people close to the sector were also announced for the transition.

Former agriculture ministers Neri Geller, Katia Abreu and Luis Carlos Guedes will take part, Alckmin told reporters, as well as Senator Carlos Favaro and Evandro Gussi, the head of local sugarcane industry group Unica.

The mining and energy group will include names such as Senator Jean Paul Prates, a strong candidate to head state-run oil company Petrobras next year, and Mauricio Tolmasquim, a professor at the Federal University of Rio de Janeiro, the vice president-elect added.

(Reporting by Bernardo Caram; Editing by Angus MacSwan)

Food prices to edge down in 2023 as recession looms – Rabobank

By Maytaal Angel

LONDON (Reuters) – Prices for agricultural commodities like coffee, feed grains and oilseeds could dip next year as many major economies enter recession, but they will remain high in historic terms, Rabobank said in a report on Wednesday.

The bank said consumers face a darkening macro-economic picture, with energy shortages, geopolitical danger and ongoing shortages of some key commodities like wheat boding ill for global food security.

Wheat remains acutely affected by the Russia-Ukraine war and the bank sees a 6 million tonne deficit next year, thanks also to uncertain weather prospects in the European Union, the United States and Argentina.

Elsewhere, Rabobank sees coffee demand growing well below average levels at 1.5%, with benign weather leaving the market in a 4 million bag surplus. It sees relatively low sugar prices meanwhile thanks again largely to benign weather.

“Agricultural prices might recede (yet) that’s not because production will improve significantly but because demand is set to be so weak,” said Carlos Mera, the bank’s head of agricultural commodities market research.

With energy, labour and other costs surging, agricultural commodity prices are about 50% higher than pre-pandemic times, the bank noted.

(Reporting by Maytaal Angel; Editing by Kirsten Donovan)

Primark owner AB Foods warns of ‘substantial’ cost inflation

By James Davey

LONDON (Reuters) -Primark owner Associated British Foods faces “substantial and volatile” input cost inflation that will hit results in its new financial year, it said on Tuesday, taking the shine off a 42% jump in 2021-22 profit.

AB Foods, which also owns sugar, grocery, ingredients and agricultural businesses, reiterated a September forecast that profit would fall in its 2022-23 financial year.

But its shares rose 4.3% in morning trading, paring losses this year to 26%, as investors took comfort from plans for a 500 million pound ($573 million) share buyback programme and an 8% increase in the group’s total dividend.

AB Foods said in September that Primark had taken a commercial decision to limit further price increases in 2022-23 beyond those already planned, seeking to maintain its value credentials among consumers.

“We have decided to hold prices for the new financial year at the levels already implemented and planned and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates,” said Chief Executive George Weston.

That decision, combined with higher energy, raw materials and labour costs as well as dollar strength that reduces its purchasing power, will dent Primark’s profit margin, the group said.

Weston told Reuters there was little point raising prices when consumers were short of cash, adding that Primark could expand its market share if rivals took an alternative approach.

He said Primark shoppers were generally being cautious on spending and budgeting more.

“People are buying essentials when they need them, not in anticipation of needing them,” he said, noting that Primark was still trading better in the UK than continental Europe.

The group booked a 206 million pound writedown for Primark’s German business, which it is looking to reposition. While options include both reducing the size of and closing some stores, Weston said Primark is committed to Germany.

AB Foods reported adjusted operating profit of 1.44 billion pounds ($1.65 billion) for the year ended Sept. 17, up from 1.01 billion pounds in 2020-21, mainly reflecting higher Primark sales after the end of COVID-related restrictions.

The group expects 2022-23 profit in its grocery business, which includes Twinings tea, Jordans cereals and Ovaltine drinks, to be broadly in line with 2021-22.

Profit in the sugar business is expected to be well ahead of 2021-22.

($1 = 0.8705 pounds)

(Reporting by James DaveyEditing by David Goodman and Mark Potter)

No point raising Primark prices if consumers are cash-strapped – AB Foods boss

LONDON (Reuters) – There is little point raising fashion retailer Primark’s low prices when consumers are short of cash, the boss of its owner said on Tuesday, adding that the group could expand its customer base if rivals take an alternative approach.

“With cash starved consumers there’s not much point,” George Weston, CEO of Associated British Foods, told Reuters.

He said if Primark raised prices further it would sell less and undermine its value credentials in the eyes of consumers.

“There’s a chance we’ll come through strongly with increased market share if others take different decisions on price,” he said after AB Foods reported full year results.

Weston said Primark shoppers were generally being cautious on spending and budgeting more.

“People are buying essentials when they need them, not in anticipation of needing them,” he said.

However, he noted that cold weather items, such as hats, scarves and coats, and items to keep people warm in the house, such as snuddies and thermal leggings have been selling “incredibly well, because we think people have been trying not to turn their central heating on.”

Weston also reckons Christmas sales have started earlier.

“People are spreading their Christmas purchases across three or four pay days, rather than relying on cash that they have in hand in December,” he said.

He said Primark stores in the UK were still performing better than stores in continental Europe.”Northern Europe has a well developed habit of saving money when they know there’s a bill to come, so Germany, Netherlands, Austria are all lagging on the sales front … Spain and Italy are better,” he said.

(Reporting by James Davey, Editing by Paul Sandle and Kate Holton)

Cuba cuts plans to export sugar with output expected to stagnate

By Marc Frank

HAVANA (Reuters) – Cuba kicks off the country´s annual sugar harvest this month, but experts and state officials say the crisis-racked Caribbean island will struggle to produce enough of the sweetener even for its own consumption, dashing plans for export.

Cuba’s communist-run government has said it plans to produce 455,000 tonnes of raw sugar this harvest cycle, 14,000 tonnes less than the previous one which hit a hundred-year low and forced the country to scrap plans for $150 million in exports.

Sugar was once the pride of Cuba, critical to its rum production, driving foreign exchange though export sales and providing employment across the island’s vast countryside.

“This is the first plan since the 1959 Revolution that does not include significant exports, though they may export some if the price is right then import later [for local consumption],” said a sugar expert consulted by Reuters, who asked to remain anonymous because he was not authorized to speak with foreign journalists.

The expert said Cuba had worked a similar deal after last year’s disastrous harvest, importing some sugar from Brazil.

Cuba historically consumes between 600,000 to 700,000 tonnes of sugar annually and has a long-standing agreement to export 400,000 tonnes to China, a deal that is now suspended, the expert and another source with access to the industry said.

State-run sugar monopoly AZCUBA has also said that sugar produced this harvest will go mainly to domestic consumption and derivatives such as rum and animal feed.

The loss of that export cash would be yet another shock to Cuba´s ailing economy, already stricken by the coronavirus pandemic and U.S. sanctions.

Just 23 mills of 56 total, hobbled by lack of fuel, supplies, spare parts and staff, will grind sugar cane during this season´s harvest, which typically ends in April.

In 1989, by contrast, Cuba had more than 100 mills and produced 8 million tonnes of raw sugar, most destined for the Soviet Union.

The century-old Uruguay mill in Escambray is among those to be shuttered this year, according to a report in the Sancti Spiritus provincial Communist Party newspaper.

“It was the most shocking decision that the collective and the emblematic factory have experienced in a long time,” the paper reported. “It was as if a relative had died; there was silence, insecurity, tears.”

The mill and surrounding plantations, like much of Cuban agriculture and industry, have seen production and efficiency dramatically decline over the last five years.

(Reporting by Marc Frank; Editing by Kirsten Donovan)

Suedzucker lifts profit forecast as price rises seen trumping higher costs

HAMBURG (Reuters) – Europe’s largest sugar producer Suedzucker on Wednesday raised its full-year profit forecast, as it expects higher sugar prices to compensate for rising energy and raw materials costs.

Suedzucker raised its forecast for group operating profits in its financial year to February 2023 to between 530 million euros and 630 million euros ($524.4 million-$623.3 million) from a previous forecast of 450 million to 550 million euros.

The year before it posted operating profit of 332 million euros.

A spokesperson for Suedzucker, which has a wide range of non-sugar interests ranging from processed foods to biofuels, told Reuters the increase would be driven largely by an improved performance in its sugar sector.

“As we said in our last quarterly report, we are achieving and we expect to be able to achieve higher sugar prices in the second half of our financial year in our main markets,” the spokesperson said.

“This will help compensate for the impact of higher raw materials and energy costs.”

Germany’s sugar industry is among heavy gas users suffering from a plunge in Russian gas exports to Europe, which has sparked a continent-wide energy crisis.

The sugar processing season to refine this year’s beet crop is now underway in Germany and usually ends around early January.

“We have taken steps to ensure energy supplies in our factories this winter,” the spokesperson said. “We are now feeling confident that we will be able to come through this year’s sugar processing season with sufficient energy,”

“But overall, the situation in Europe with energy supplies is still uncertain.”

Sueducker stressed on Wednesday that the impact of the Ukraine war on its markets remain difficult to assess, while risks from the coronavirus pandemic also remain.

($1 = 1.0107 euros)

(Reporting by Michael Hogan; Editing by Jan Harvey)

Brazil’s rural boomtowns ensure Bolsonarismo’s future

By Gabriel Stargardter

CATANDUVA, Brazil (Reuters) – The small city of Catanduva in the rural farm belt of Sao Paulo state has been ahead of the political curve in Brazil.

In 1996, the city elected leftist Felix Sahao as its first Workers Party (PT) mayor – a full six years before Luiz Inacio Lula da Silva became president of Brazil, establishing nearly 14 years of PT rule.

But Sahao’s administration was marred by financial scandals, presaging the vast corruption probe that jailed Lula, destroyed the PT’s reputation, and paved the way for the scorched-earth politics of far-right President Jair Bolsonaro.

The residents of Catanduva, who have benefited from robust Chinese demand for Brazilian commodities, are now fully behind Bolsonaro. They are attracted to his unique mix of social conservatism, evangelical fervor and small government, sowed in the fertile soils of a booming agribusiness sector and watered with hatred of the “communist” PT.

So even if, as polls suggest, the president loses to Lula in Sunday’s presidential runoff, the whirring tractors and bulging wallets of conservative boomtowns like Catanduva suggest Bolsonarismo is here to stay.

Bolsonaro has drawn the lion’s share of his campaign financing from agribusiness leaders and won the most first-round votes in six of Brazil’s seven top-producing agricultural states. In Catanduva, which is surrounded by sugar cane fields, citrus arbors and cattle ranches, the president got over 62% of votes, more than double Lula’s haul.

“Today, Catanduva reflects a situation taking place across Brazil,” said the city’s mayor, Father Osvaldo Oliveira, a Catholic priest from the center-right Brazilian Social Democracy Party (PSDB) who also backs Bolsonaro and his candidate leading the race for Sao Paulo state governor, Tarcisio Freitas.

Oliveira said the PT’s more generous social spending and state-driven economic policies had once been useful, but hadn’t changed in 30 years, while Bolsonaro’s “updated proposal” offered a shot at deliverance: “A rescue of Brazilians’ self-esteem, of patriotism, of civics.”

Since Sahao stepped down in 2005, the PT has spent nearly two decades locked out of power at Catanduva’s city hall. In recent years, the centrist establishment that took its place has lined up squarely behind Bolsonaro.

Sahao said a conservative sweep of Sao Paulo, with Freitas in the statehouse, would bury the PT’s hopes of regaining power in Brazil’s richest and most populous state.

“If Bolsonaro wins, and Tarcisio wins, forget about it,” he said.

FARM BOOM

This month’s first round of voting showed pollsters far underestimated Bolsonaro’s enduring appeal in Catanduva and other cities across Brazil’s agricultural heartland, which has become the engine of the country’s economy.

Agribusiness contributed 27.6% of Brazil’s gross domestic product (GDP) last year, according to the University of Sao Paulo’s Center for Advanced Studies in Applied Economics, the highest percentage since 2003, and up from 20% in 2018 when Bolsonaro was elected.

“Our region is driven by agribusiness,” said Catanduva Mayor Oliveira. “With the industry heating up, it means the city is doing well, the economy is moving.”

Record-low interest rates during the first half of Bolsonaro’s term helped Brazil’s farmers to invest in capital, while a weak exchange rate and robust global demand have made commodity exports highly lucrative.

Bolsonaro’s support for property rights and his loosening of gun laws for self-defense also appeal to rural producers who associate the PT with landless peasants who invade unproductive plots, said Allim Bassitt, a 65-year-old cane and beef farmer.

The PT’s Taise Braz, Catanduva’s first-ever Black councilwoman, said the most die-hard Bolsonaristas can be found among the city’s elite, comprised of wealthy farmers and businessmen. Although their numbers are relatively small, she said their views have an outsized influence on an aspiring middle class.

Bolsonarismo is amplified through respected civic groups like Lions International, the Rotary Club and the Masons, which have become hotbeds of support for the president, said Beth Sahao, a PT state lawmaker and sister of the former mayor.

The city’s evangelical churches perform a similar function among the working class, she added, promoting an up-by-the-bootstraps conservatism that the PT has been unable to counter.

“People think, ‘I have a job because I got it, I have my own house because I worked for it'” said Sahao. “So they start to turn away from public policies, from social policies, from the country’s economy.”

GRASSROOTS SHRIVEL

Bolsonaro’s attacks against the PT land with particular force in Catanduva, where few have forgotten the scandals over misappropriated public funds from former Mayor Sahao’s time.

Sahao said he had done nothing wrong, and had been “persecuted by the prosecutor’s office. The city knows that.”

The PT candidate to replace him came last in the 2004 vote. Beth Sahao ran and lost in the four mayoral elections since, garnering under 10% of the vote in her first attempt.

The national rout for the PT came over a decade later, when a corruption investigation revealed huge kickback schemes on public contracts, followed by Brazil’s worst economic recession on record, and the impeachment of Lula’s hand-picked successor.

The Supreme Court overturned convictions tying Lula personally to the bribery scandals, and his political talents have revived his career, but many Brazilians still struggle to forgive the PT’s missteps.

A decade ago, the PT was one of three parties governing the most cities in Brazil. Now it is not even in the top ten.

But it is not the only traditional party battered by Bolsonarismo.

The PSDB, long the most powerful force in Sao Paulo politics, has struggled to stay relevant as Bolsonaro has destroyed the center-right and offered a more radical opposition to the left. Across Sao Paulo, countless PSDB mayors and state lawmakers have, like Father Oliveira of Catanduva, thrown in their lot with Bolsonaro.

After winning every gubernatorial race in the state since 1994, the PSDB’s candidate, current Governor Rodrigo Garcia, failed to even make Sunday’s runoff.

Polls show Freitas, Bolsonaro’s former infrastructure minister, is likely to beat the PT candidate, joining the ranks of Bolsonaro-backing governors including Romeu Zema of neighboring Minas Gerais and Claudio Castro in Rio de Janeiro.

If Freitas wins, Bolsonaro allies would control the three largest state economies in Brazil.

Bassitt, the farmer, said the conservative values of rural, small-town Brazil were now the driving force in national politics. Those beliefs “dovetail nicely with Bolsonarismo,” he said. “They don’t click with Lula and the PT’s socialism.”

($1 = 5.3067 reais)

(Reporting by Gabriel Stargardter; Editing by Brad Haynes and Chris Sanders)

Barry Callebaut raises the bar in bid to redefine chocolate making

By Maytaal Angel

LONDON (Reuters) – In a move it hopes will redefine the way chocolate is made, Swiss-based Barry Callebaut launched a new bar on Thursday, the fruit of more than 20 years of research into cocoa beans.

The world’s biggest chocolatier said its “second generation” chocolate will use around 50% less sugar than traditional chocolate thanks to a new way of cultivating, fermenting and roasting cocoa beans that reduces their bitter taste.

The product, which will also use about 60-80% more cocoa, is likely to appeal to more health-conscious consumers and get ahead of laws expected to limit sugar consumption in the future, analysts said.

“Anything cutting sugar or using simpler, cleaner, recipes is going to be a positive given consumer and thus corporate demand for those products,” said Kepler Cheuvreux analyst Jon Cox.

The chocolate giant, which supplies the world’s biggest consumer brands including Nestle, said its new chocolate has been tested by independent global research agency MMR in the United States, Britain and China, and found to have high consumer appeal.

“By applying the (new chocolate-making) principle, Barry Callebaut could redefine chocolate completely: ‘putting cocoa first, sugar last’,” the company said in a statement on the product launch.

The innovation could eventually help increase global cocoa consumption and prices should it be widely adopted, while it might leave sugar consumption largely unscathed as sugar cane is increasingly used to make ethanol, industry experts said.

“For cocoa, (it’s) really positive for consumption and therefore the price outlook. However, I think we are talking about years not months,” said a London-based consultant.

World cocoa prices are more than four times that of sugar.

    The new chocolate is more expensive to produce and might be priced slightly higher than regular chocolate, a Barry Callebaut spokesperson said. It could, however, also be sold in smaller bar sizes and is ultimately not aimed at upmarket consumers.

One in four chocolate and cocoa products consumed worldwide are made with Barry Callebaut ingredients and the group processes almost one million tonnes of cocoa a year, about a fifth of the global volume.

Barry Callebaut has since 2017 launched healthier alternatives such as “ruby chocolate”, “wholefruit chocolate” and a cocoa-based drink “Elix”, with varying degrees of success.

    It generally takes between a year or two for a new product to go from launch to supermarket shelves.

“(The) approach by Barry Callebaut fits the way the food market is going,” said Tedd George, commodities expert and founder of Kleos Advisory. “Sugar is definitely the new tobacco. The way chocolate is made will gradually move in this direction as legislation against sugar in food hardens.”

(Reporting by Maytaal Angel; Editing by Matt Scuffham and David Evans)

Russia says grain deal extension ‘directly depends’ on easing restrictions on its exports

(Reuters) – Russia on Monday told a top United Nations representative that the extension of a landmark Black Sea grain deal was dependent on the West easing Russia’s own agricultural and fertiliser exports, the defence ministry said in a statement.

In a meeting in Moscow, Russia’s deputy defence minister Alexander Fomin told U.N. Under-Secretary-General Martin Griffiths that extending the deal, which unlocked Ukrainian agricultural exports from its southern ports, “directly depends on ensuring full implementation of all previously reached agreements.”

Russia says the impact of Western sanctions on logistics, payments, shipping and insurance prevents it from exporting fertilisers and chemicals like ammonia and that easing those restrictions was a key part of the deal, brokered in July by Turkey and the United Nations.

(Reporting by Reuters)

Cloudy skies for Brazil sugar and ethanol as country heads back to polls

By Marcelo Teixeira

NEW YORK (Reuters) – Brazilian sugar and ethanol makers will likely face a less favorable business environment regardless of who emerges victorious from the hotly-contested Brazilian presidential election on Oct. 30, analysts and experts say.

Citizens go to the polls in less than three weeks for a run-off between incumbent right-wing President Jair Bolsonaro and his opponent, the leftist, former President Luiz Inacio Lula da Silva.

“It is bad with Bolsonaro, could be worse with Lula,” said sugar and ethanol analyst Arnaldo Correa, a director at Archer Consulting.

The ethanol and sugar industry had a strong recovery from the pandemic as both prices for sugar and ethanol rose to near-record levels. But both candidates support policies that the industry believes could hurt demand, as they seek to lower costs for consumers.

Bolsonaro scrapped federal taxes on energy and led states to cut other taxes on fuels in a gambit to boost his chances of being reelected. Since taxes were heavier on fossil fuels, ethanol lost its price edge over gasoline at pumps. Most Brazilian cars can switch between sugar-based ethanol and conventional gasoline.

Bolsonaro has also said he has no plans to reinstate the taxes next year if reelected, so mills would be expected to shun ethanol and produce more sugar, which could depress global prices for the sweetener.

Lula, if he wins, has promised to change fuel pricing policy at state-controlled Petrobras to bring gasoline prices down, which could be even worse for the mills because it would further squeeze margins on ethanol.

In the first round of the election on October 2, Lula received 48% of the vote while Bolsonaro garnered 43%. Since no candidate received a majority, the two go to a runoff.

Lula’s Workers Party latest run at the helm with former President Dilma Rousseff from 2011 to 2016 brought havoc in the sugar and ethanol sector, as the government kept gasoline prices artificially low to stem inflation. Profit margins for ethanol fell, along with global sugar prices.

Dozens of mills went bankrupt, and several have only recently recovered.

“Mills sold ethanol below production cost 60% of the time during that period,” said Correa, adding that the industry took on more debt as a result.

Bolsonaro, meanwhile, in July intervened in the country’s first carbon market in ways that have been detrimental, said Soren Jensen, a former Copersucar executive and an expert in renewable fuels.

That market, known as Renovabio, was designed to boost renewable fuels by allowing mills to sell carbon credits (CBios) generated by the use of biofuels instead of oil-based fuels. Fuel distributors were obliged to buy those credits to offset fossil fuels’ emissions.

Bolsonaro’s administration decided to postpone Renovabio’s compliance targets in yet another move to cut fuel prices, causing prices for those credits to collapse. “It was the beginning of the end for the program,” Jensen said.

Equity research teams at Citi and investment bank BTG Pactual said all those factors increased risks for the financial performance of sugar and ethanol companies.

(Reporting by Marcelo Teixeira; editing by Diane Craft)

Romanian farmers agree to buy Tereos sugar factory

PARIS/BUCHAREST (Reuters) – French sugar maker Tereos said on Thursday it had reached an agreement with a group of Romanian farmers to sell its local sugar business, less than a month after saying it would close the factory because talks with a potential buyer had failed.

“We have an agreement in principle with a group of farmers for them to take over the Romanian business,” a Tereos spokesperson told Reuters, confirming information in local media.

Tereos has been trying to sell its loss-making Romanian activities for more than a year as part of a wider deleveraging strategy.

The factory, located in Ludus, is one of Romania’s two last-remaining sugar processing plants. It has suffered from a steady reduction in the amount of land planted with sugar in the country.

It had a capacity of 60,000 tonnes of sugar but had strongly reduced volumes in the past years, the Tereos spokesperson said. Its final closure had been planned for the beginning of 2023.

“The first step has been made, we are on the right path and the factory will reopen,” Teodor Aflat, who farms on 8,000 hectares in the central Romanian county of Sibiu, was quoted saying by state news agency Agerpres.

The company interested in buying Tereos’ plant before talks collapsed was Romanian group Scandia Food, which is actively looking at potential acquisitions to consolidate its business.

Chief Executive Andrei Ursulescu told Reuters at the time Scandia Food wanted to see the factory in production to conduct an assessment and that the price Tereos asked was relatively prohibitive.

(Reporting by Luiza Ilie in Bucharest and Sybille de La Hamaide in Paris; Editing by David Evans)

Suedzucker quarterly profits surge, sees higher full-year earnings

HAMBURG (Reuters) -Europe’s largest sugar producer Suedzucker on Thursday posted a rise of almost 80% in quarterly earnings and again forecast increased full-year profits, despite higher energy and raw materials costs, supported by the strong performance of its sugar and biofuel sectors.

The company expects to be able to pass on higher costs in increased sugar prices but its performance in coming months will depend on sufficient energy supplies being available after Russia cut gas deliveries to Europe, it said.

Suedzucker said operating profit in the second quarter to the end of August of its 2022/23 fiscal year rose 79.5% to 153 million euros ($148.44 million).

A strong performance by its biofuels unit CropEnergies supported, it said.

Suedzucker repeated its forecast in August of a 2022/23 full-year operating profit of 450 million euros to 550 million euros, up from 332 million euros the previous year.

The European Union will remain a net sugar importer in the 2022/23 season and Suedzucker will enjoy a positive market environment, the company said.

“This should enable Suedzucker to pass on the drastic increase in raw material and energy costs with significant sugar price increases beginning in October 2022,” it said.

In Europe, the sugar beet area for the crop this winter is down by about 4% on the year, it said.

“World and EU sugar prices continue to rise and we are confident we will achieve a further improvement in prices for Suedzucker’s production in coming months,” a Suedzucker spokesperson told Reuters.

“This year’s sugar harvest processing campaign started in September and is so far progressing well, rain in recent weeks in Germany could provide a late positive impact on crops.”

Suedzucker has in past years been actively seeking more gas use as part of its carbon-reduction programme.

“In past months, alternative energy sources to gas have been assessed for all our sugar factories such as coal or oil,” the spokesman said. “But we are still predominantly using gas.”

(Reporting by Michael Hogan, editing by Miranda Murray, Robert Birsel)

France taps strategic fuel stocks to avoid sugar factory stoppages

By Sybille de La Hamaide

PARIS (Reuters) – France has released strategic fuel reserves for sugar producers after they warned that a lack of diesel impacting the harvesting of sugar beet could lead to factory stoppages, producer group SNFS said on Monday.

Strikes over wages at TotalEnergies and Exxon Mobil refineries have disrupted refining and delivery, leaving a third of French fuel stations running short. The French government said last week that it had tapped its strategic fuel reserves to resupply stations that had run dry.

France’s largest sugar maker Tereos said last month it had to slow output at some factories after TotalEnergies said it would be unable to supply diesel. It declined to comment on the strategic stock release.

Cristal Union, France’s second largest producer, said its own fuel stocks had allowed it to maintain production rates last week, but that it had used strategic reserves over the weekend.

Sugar factories, which usually run from September to late January or early February in France, rely on farmers having enough fuel to harvest sugar beet and transport it to a factory to be processed.

The decision to release strategic stocks late last week followed a meeting between sugar producers and French Agriculture Minister Marc Fesneau last Wednesday.

“We explained that there were worrying tensions that risked leading to temporary factory closures,” SNFS Chairman Christian Spiegeleer told Reuters.

“The state agreed to tap the strategic stocks so that the lack of diesel does not affect the factories’ proper functioning,” he added.

The French Agriculture Ministry had no immediate comment.

(Reporting by Sybille de La Hamaide; Editing by Alexander Smith)

Bolsonaro ally says Brazil farm sector can adapt to Lula victory

BRASILIA (Reuters) – The leader of Brazilian President Jair Bolsonaro’s party and the farm caucus in the Senate said on Friday that the powerful agribusiness sector is pragmatic and will adapt to an eventual victory by the incumbent’s leftist presidential challenger.

Senator Wellington Fagundes, re-elected on Sunday for Mato Grosso, Brazil’s top grain-producing state, told Reuters he hopes Bolsonaro will win re-election. But a win by former President Luis Inacio Lula da Silva would not be the end of the world for the farm industry.

“Farmers will jump into Lula’s lap the day after he is elected. They are very pragmatic,” said Fagundes, who has served Mato Grosso for 20 years in both chambers of Congress.

Fagundes said he believes Bolsonaro will cede power without contesting the result of the Oct. 30 runoff if Lula wins, playing down the danger of the president’s attacks on Brazil’s electronic voting system.

“He attacks the electoral system because he is a provocateur,” the senator said of Bolsonaro’s baseless claims that its electronic voting system is vulnerable to fraud.

Lula won the most votes in the first round of the election on Sunday, with 48% support against 43% for Bolsonaro, who outperformed opinion surveys amid a wave of conservative sentiment. His pro-gun views and opposition to indigenous land claims have made him the darling of many farm sector leaders.

Bolsonaro’s right-wing Liberal Party emerged from the election as the largest in both chambers of Congress.

Former Agriculture Minister Tereza Cristina Dias, who won a Senate seat on Sunday, is a strong candidate to be the next president of the Senate, Fagundes said.

He said the chances of another newly elected Bolsonaro ally, former Women’s Rights Minister Damares Alves, getting the position are “zero.”

(Reporting by Anthony Boadle and Ricardo Brito; Editing by Marguerita Choy)

‘Almost a luxury’: EU coffee prices up 16.9% in August

(Reuters) -Starting the day with a cup of coffee has become more expensive, the European Union’s statistics office said on Thursday, highlighting a jump in the price of the staple along with those of sugar and milk.

“Recent price rises might make this morning staple almost a luxury,” Eurostat said, reporting that coffee prices had on average surged 16.9% in August from a year earlier.

Fresh whole milk now cost 24.3% more on average, while consumers paid 22.2% more for fresh low fat milk, Eurostat said.

Sugar saw the sharpest increase, with its average price jumping 33.4%.

The data showed prices had risen for these four items in all EU member countries except Malta, where the price of fresh low fat milk was unchanged.

Finland and Lithuania saw the highest changes in coffee prices, with increases of 43.6% and 39.9% respectively, followed by Sweden and Estonia.

Poland saw the highest jump in sugar prices, which leapt 109.2% from August 2021.

In the euro zone – the 19 countries sharing the euro – consumer price inflation hit 9.1% in August, driven by energy and food prices. It hit a new record high of 10% in September, according to Eurostat’s flash estimate.

(Reporting by Valentine Baldassari in Gdansk; Editing by Bernadette Baum)

Tereos to close Romanian sugar factory after takeover talks fail

PARIS/BUCHAREST (Reuters) – French sugar and ethanol group Tereos has decided to close and dismantle its factory in Romania after talks with a local company interested in taking over the plant failed to go through, a spokesperson said.

Tereos, the world’s second largest sugar producer by volume, had said earlier this year it was planning to shut its Ludus factory.

The Romanian agriculture minister at the time later said he was in contact with Tereos to try and save the sugar factory.

“The Romanian Minister of Agriculture had seconded a private company to study the purchase of Tereos Romania. We were open to this possibility,” a Tereos spokesperson told Reuters.

“But the private company told us that it was unable to pursue the acquisition project,” she added. “The question was not the price, mainly the timing. They had missed a (sugar beet) campaign.”

The interested company was Romanian group Scandia Food, which is actively looking at potential acquisitions to consolidate its business. Chief executive officer Andrei Ursulescu said Scandia Food wanted to see the factory in production to conduct an assessment.

“The price Tereos was asking was relatively prohibitive for something we were not given access to conduct a technical evaluation,” Ursulescu told Reuters.

“We have proposed a postponement until a time when we can see it working. They wanted a signed binding offer by Oct. 31 and a signed deal by Nov. 30. We’ve completed 7-8 transactions already, we have never reached a deal in such a short time.”

The plant, which in 2020 had around 180 employees and is one of Romania’s two last-remaining sugar processing plants, has been loss making amid a steady reduction in the amount of land planted with sugar in the country.

It had a capacity of 60,000 tonnes of sugar but had strongly reduced volumes in the past years. Its final closure was planned for the beginning of 2023, the spokesperson said.

Contacted by Reuters Romanian agriculture minister Petre Daea said he was not aware of the state of negotiations.

“From what I know, the company (Tereos) is in negotiations with a company interested in buying … which wants to keep the factory going,” Daea said.

(Reporting by Sybille de La Hamaide in Paris and Luiza Ilie in Bucharest)

In Colombia, land occupations raise tensions and spook investors

By Nelson Bocanegra

CORINTO, Colombia (Reuters) – A machete slung across his chest, sugarcane worker Aldemar Moreno guards the entrance to the farm where he has been employed for 23 years, ready to defend it from land occupations by indigenous groups and others that have erupted around Colombia.

“We have taken the decision that if to defend our rights… we have to die, we will die because this is what my family depends on,” said Moreno, as he stood at the entrance of the large corporate farm in Corinto, in southwestern Cauca province.

Land occupations have spiked since the election of leftist President Gustavo Petro, who has promised to spend tens of billions of dollars to ensure small-scale farmers and indigenous groups have access to more land, as part of a plan to correct generations of deep inequality.

Indigenous communities – many disenchanted by years of unmet government promises – have long histories of occupations, which they call liberations.

But recent occupations are also being led by impoverished farmers, many of whom have interpreted Petro’s promises as permission to carry them out, despite his insistence reforms will take place according to law.

They are perhaps the clearest example of the delicate path Petro must tread if he wants to meet the high hopes raised by his idealistic campaign rhetoric without stirring conflict or alienating the agricultural sector. Farming will be particularly crucial for Petro in his bid to diversify the economy away from oil and coal.

“The issue of liberation is a wider, deeper concept that includes the recovery not just of land, but of water, of wild areas, of animals,” said an indigenous leader who gave his name as Cruz.

Occupying the Castilla sugarcane farm in Cauca with 450 others, he said his group had taken inspiration from Petro’s promises, but acknowledged indigenous leadership may be misinterpreting the pledges.

The occupations threaten investment, business people say, and have drawn sharp criticism from Petro’s opposition in congress.

Sugarcane industry group Asocana said invasions have stopped production of around 75,000 tonnes of sugar this year, equivalent to about half a month’s average output.

“Who loses if business owners pack up their processing plants and go somewhere else?’ said sugar worker Juan Carlos Agudelo. “We are the ones who lose because our jobs are all we have.”

There are currently 108 land occupations in Colombia, affecting one third of its provinces, the human rights ombudsman’s office said last week. Though comparative figures were unavailable, multiple organizations consulted by Reuters said occupations have risen in recent months.

“Amid high expectations about the structural changes the government is promoting, there needs to be very swift action to diminish the risk that social movements start new mobilizations,” ombudsman Carlos Camargo said.

The government rejects occupations and says both landowners and occupiers must respect the rule of law.

“We won’t accept any self-defense forces. It is the state that must act very strongly to defend property rights,” Agriculture Minister Cecilia Lopez told congress this month. “Absurd ways of acquiring land without any right, that’s where the law will be applied with all force.”

Colombian law allows police to remove occupiers within the first 48 hours. Beyond that time frame, landowners must use a slow judicial process.

Invasions could become even more tense if illegal armed groups become involved, lawmakers and the ombudsman’s office warned.

At least 13 occupations are connected to armed groups, the ombudsman’s office said, without giving further details.

“It’s a time bomb,” said Senator Andres Guerra, of the right-wing Democratic Center party, after a congressional debate on occupations.

Though several armed groups who participated in Colombia’s long conflict – including right-wing paramilitaries and the Marxist FARC rebels – have demobilized in the last 15 years, armed guerrillas and crime gangs descended from the paramilitaries remain.

Cruz said a dozen armed men had been spotted by his group moving surreptitiously through the sugarcane near the occupation. They identified themselves as military, but wore no insignia, he said.

“We don’t know what is happening with the reactivation of paramilitaries here in north Cauca,” he said. “It’s a huge worry for us as liberators.”

His fears are founded in history – 21 indigenous Colombians were killed in a December 1991 attack by paramilitaries during an occupation in Caloto municipality.

Several days after the Reuters visit to the Castilla occupation, four indigenous people were injured by gunfire in an attack by an unknown group, the indigenous group said.

‘INVESTMENT WON’T COME’

Occupations are beginning to hit potential investment, business people say.

An investment fund from the Middle East put the brakes on plans to invest $10 million in an avocado farm because of occupations, said Gerardo Arroyo, head of the Cauca business guild. He declined to name the potential investor.

“Invasions generate insecurity, instability and that of course smashes investment confidence in the province,” Arroyo said.

“Obviously investment won’t come” if property rights are put at risk, said Nicolas Perez, head of the palm growers’ association. Occupations at two palm farms over the last month ended peacefully, he added.

Others fear the occupations could spark ethnic conflicts between indigenous groups and Afro-Colombians, who have also historically had their land rights marginalized.

“That is what is being incited, a war, because at the end there will be confrontations between Blacks and the indigenous,” said small-scale sugarcane farmer Otoniel Candelo, 64, president of the Afro-Colombian community committee in El Tetillo Tamboral municipality. “We also aren’t going to stand to be kicked out.”

But indigenous leaders say their communities will stand firm.

“The indigenous movement has made many deals with different governments to guarantee land rights, which up to now haven’t materialized,” said movement leader Milady Dicue.

“Communities will keep resisting.”

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Rosalba O’Brien)

Tereos slows sugar output as TotalEnergies halts fuel supplies

PARIS (Reuters) – France’s largest sugar maker Tereos had to slow output slightly at some factories after TotalEnergies said ongoing strikes at its refineries would prevent it from supplying diesel fuel until the end of the week, a spokesperson said on Thursday.

Strikes over wage demands have disrupted the French oil giant’s products refining and delivery for the third day on Thursday, threatening supplies at a time of deepening energy instability.

“TotalEnergies has warned us yesterday that we would not be supplied this week,” a Tereos spokesperson said in answer to a Reuters question.

“We found substitution supplies to last until at least the end of the week but there have been some adjustments made in production rates,” she added. She did specify how much production had slowed, and said the slowdown did not affect all sites.

Tereos provides farmers with fuel for the trucks that bring sugar beets from the fields to the factory where they are processed into sugar and ethanol.

Cristal Union, France’s second-largest sugar maker, was not facing disruption to lorry fuel supplies, the group told Reuters.

This comes just as French sugar producers are trying to speed up production ahead of possible energy restrictions or shortages this winter if Russia cuts off gas supplies.

Sugar production is among the most energy-intensive industries. French factories, which usually run between mid-September to late January or early February, are highly reliant on gas to transform their sugar beets into the sweetener.

(Reporting by Sybille de La Hamaide; Editing by David Gregorio)

Hurricane Ian to worsen bleak outlook for U.S. orange juice industry

By Marcelo Teixeira

NEW YORK (Reuters) – Hurricane Ian is likely to have worsened what was already expected to be the smallest U.S. orange crop in 55 years after it blasted through a large fruit producing area when it passed through Florida this week, flooding farms and causing oranges to drop from trees.

Precise information on losses for citrus producers in top grower Florida will take days to be released, analysts said, as people in the area deal with power outages and flooding makes it difficult to check on farms. Orange juice futures jumped in the last three sessions.

Florida orange production was already expected to be poor, as planted areas have been falling yearly due to real estate expansion and the spread of the greening fungus disease.

According to the U.S. Department of Agriculture (USDA), U.S. orange production was estimated to fall 13% to the lowest in over 55 years at 3.5 million tons before the storm.

“Some of the growers that are still investing in citrus production in Florida, battling the disease with new varieties, will be hard hit by this storm,” said soft commodities analyst Judy Ganes.

She said that the strong winds have likely “transported” the greening fungus from abandoned orange farms to renovated ones, wasting the work and investment.

Ian’s aftermath would be bad for the juice industry.

Although imports from Brazil and Mexico currently make up for most of the orange juice consumed in the United States, Florida’s production was important to the industry since it is mostly the not from concentrate (NFC) variety, which has gained popularity among consumers compared to the older style, frozen concentrated orange juice (FCOJ).

Foreign suppliers prefer to export FCOJ since it takes less space in vessels and is easier to handle.

Ganes said that if there is a shortage of NFC juice in the market, or if prices for that skyrocket, the industry could further lose share for other beverages.

(Reporting by Marcelo Teixeira; Editing by Marguerita Choy)