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EU 2015/16 sugar crop year begins; traders eye final yield, production

https://www.chemnet.com   Oct 06,2015 Platts

The EU 2015-16 crop year officially began Thursday, October 1, with Platts Western first assessment of the new crop for the Western Europe Delivered market at Eur495/mt Friday.

Platts heard France Delivered was valued at Eur500/mt, Belgium at Eur495/mt, the Netherlands at Eur495/mt, Germany at Eur490/mt and the UK at Eur490/mt.

Traders said there was uncertainty about how much product there will be available after a record yield last year, particularly after a dry summer.

EU sugar beet test results were a mixed bag when the European Commission published the latest MARS data last week. The Dutch beet yield, for example, was forecast at 80.92 mt/ha, down from the August forecast of 81.24 mt/ha.
Dutch producer Suiker Unie said sugar content for its beet crop in the Netherlands was higher than previously expected for the new campaign, due to more favorable weather conditions across the EU during September.

Sugar content averaged around 15.5% by the end of the month, with the highest recorded in West Zeeland Flanders at 16.1% and the lowest in Tholen/St.Phillips at 14.6%.

Farmers and contractors have been "surprised by the high yields", and had high expectations for the new crop, the producer said.

Going forward, temperatures will remain warm on the western European beet belt bordering northern France and Belgium at 17-24 degrees Celsius, falling to 16-18 C through to October 12.

Conditions will generally remain dry until Thursday, with 5 millimeters of rain forecast. Some 24 mm was then forecast through the following seven days.

The first assessment by Platts of the new crop year for the Mediterranean Delivered market was a Eur30/mt premium to Western Europe, at Eur525/mt.

It took into account Spain Delivered valued at Eur520/mt, Northern Italy Delivered at Eur520/mt and Southern Italy at Eur535/mt. The Greek Delivered market was valued at Eur520/mt.

September sunshine may have added cheer in some corners of the market, but total production was still down year on year across Europe.

Western Europe typically exports volume to Mediterranean markets such as Greece, Italy and Spain. Those countries have been left "buying hand to mouth", a source said, as the western market prioritizes its own tighter domestic needs above its neighbors' requirements.

EXPORT MARKET EYES LICENSE ALLOCATION

Platts FOB Containers EU 45 sugar assessment was assessed Friday unchanged week on week at a premium of $33/mt to the December (Z) White Sugar Futures (London 5) contract, with the outright price up $21.10/mt to $414.10/mt.

The European Commission confirmed last week the EU had exported the entire 1.35 million mt out-of-quota white sugar export allocation for the 2014/15 crop year by the September 30 deadline.

There was a rush of activity in early September, as traders moved quickly to shift any remaining allocated volume out of the EU to arrive at destination by the September 30 deadline to avoid penalties and mitigate losses.

Some scraps remained at the very last minute in France, Germany and the Netherlands, heard sold as low as flat against the futures contract in a last ditch attempt to remove any remnant of sugar from participants hands.

All eyes are now on the new allocation of export licenses for 2015/16.

Crop export licenses were heard requested this week, in a first tranche of 650,000 mt, with the results expected on October 10.
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