German sugar demand up but its EU quota unchanged

Germany produced 3.64 million tonnes of white sugar during the 2010/11 season according to the German sugar industry association WVZ, down from the 4.2 million tonnes produced during the 2009/10 season.  Bad weather reducing sucrose content was to blame.  Initially a heat wave in the summer, followed by late rains and then a very cold winter impacted the crop.  The 2010/11 season is now complete.

German sugar supplies stand at 3.86 million tonnes which is almost 1 million tonnes above Germany’s EU quota of 2.89.  The EU sets quotas for sugar production which is subsidized across the EU.  Above quota sales are restricted to industrial use such as ethanol production.

Imports into the EU are lower due to higher world sugar prices making other destinations more attractive.  German demand for sugar is likely to increase following the government’s decision to increase the percentage of ethanol blended into gasoline in Germany.  This is likely to also increase the size of the German beet crop during the 2011 season which commences in the winter.

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