Market developments in the sugar business
Market developments: Central Europe region
The Central Europe region mainly supplies customers in Germany. The long winter and rainy spring depressed sales and revenues for the German manufacturers of beverages, ice cream and grill sauces. Nordzucker AG’s revenues from quota sugar were also below expectations in these areas as a result. The decline was more than offset by higher sales in other sectors, however, so that total sales of quota sugar went up year on year by around 24,000 tonnes.
The European Commission’s steps to increase supply, higher stock levels in the EU and lower prices for imports meant that prices for quota sugar in Germany came under increasing pressure from October 2013.
Sales of non-quota sugar came to 98,000 tonnes in the reporting year, and were thereby well above the previous year.
Market developments: Northern Europe region
The Northern Europe region consists essentially of Sweden, Finland, Denmark, Norway, Ireland and the Baltic states. Sugar from internal production is supplemented by world market imports of raw cane sugar for refining.
Nordic Sugar maintained its strong position in the Northern Europe region and was even able to extend it in some markets, selling around 800,000 tonnes of quota sugar to industrial and retail customers. As in Germany, the prices in Northern Europe came under pressure at the beginning of the new sugar marketing year.
High yields in 2012/2013 again enabled Nordic Sugar to sell additional volumes of non-quota sugar in the reporting year, supplying customers from the chemical industry and markets outside the EU. Volumes declined slightly, however, from 320,000 to 280,000 tonnes.
Market developments: Eastern Europe region
The Eastern Europe region supplies customers in Poland and Slovakia from its own local production. Nordzucker also has a strong market position in a number of other countries in South-Eastern Europe. On all markets, Nordzucker mainly supplies large international customers as well as a multitude of national and regional customers. In order to meet demand in excess of the quota in Poland and Slovakia, the Eastern Europe region refines raw sugar at the plant in Chełmża, Poland. In addition, sugar from other regions of the Nordzucker Group is imported. As in the previous year, Nordzucker sold about 507,000 tonnes of quota sugar in Eastern Europe.
As in the two other regions, sales prices for quota and non-quota sugar declined over the course of the year. This price trend had a particularly rapid impact in Eastern Europe, because some customers here traditionally buy sugar on short-term contracts.
The previous year’s high level of non-quota sugar sales could not be repeated. Total sales fell by around 34,000 tonnes.