Sugar Market Turmoil: Ukrainian Competition Reshapes European Supply Chains

The European sugar market is facing a period of unprecedented disruption, with Polish sugar producers grappling with losses and rapidly shifting competitive dynamics. The dominant force behind this upheaval is the surge of sugar imports from Ukraine. As highlighted by Marcin Wroński from the Samoobrona farmers’ union, not only is Ukrainian sugar outcompeting domestic production in Poland, it is also encroaching on established export markets such as Germany, France, and Italy—traditionally strongholds for Polish and EU sugar. The result is stark: the nation’s leading sugar producer, Krajowa Spółka Cukrowa (Krajowa Grupa Spożywcza), is projecting losses of up to minus 300 million PLN.

This financial strain is compounded by growing Ukrainian beet sugar production, fueled by modernised facilities—even as the price for sugar beet contracts in the region falls (down to 33 EUR/ton from 46 EUR/ton two years ago) while production costs continue to rise. The sector, once profitable thanks to higher beet prices and stable demand, now faces potential contraction as many factories, especially those controlled by German firms like Pfeiffer & Langen and NordSuker, seek to reduce future contracting volumes. Meanwhile, the global context is telling: while beet sugar plays a major role only in Europe, Israel, and a handful of other locations, the influx of Ukrainian supply is overwhelming a relatively small market for white (refined) sugar. As Polish processors and growers assess their future, European sugar’s centre of gravity is shifting eastward.

📈 Prices

Origin	Location	Type	Latest Price (EUR/kg)	Previous Price (EUR/kg)	Update Date	Sentiment
LT	Mirijampole	ICUMSA 45, 0.2-1.2 mm	0.48	0.48	2026-01-05	Stable
GB	Norfolk	ICUMSA 32, 0.3-0.6 mm	0.45	0.45	2025-12-30	Stable
UA	Vinnytsia Oblast	ICUMSA 45, 0.4-1.0 mm	0.44	0.44	2025-12-30	Competitive/Pressure
CZ	Vyškov	ICUMSA 45, 0.16-0.8 mm	0.44	0.44	2025-12-30	Pressure
DE	Berlin	ICUMSA 45, 0.4-0.65 mm	0.48	0.48	2025-12-30	Stable

🌍 Supply & Demand

• Rapidly increasing Ukrainian sugar beet production is flooding EU markets, reducing local producer margins.
• German companies (e.g., Pfeiffer & Langen, NordSuker) are investing in Ukrainian sugar plants, boosting capacity and output in Ukraine.
• Historically, the EU white sugar market is relatively small, and the expansion of Ukrainian-origin sugar has had a disproportionate impact.
• Beet sugar profitability in Poland and neighbouring markets is eroding: contract prices fell from 46 to 33 EUR/ton in two years, while costs have risen.
• Polish growers and factories are contemplating cuts to beet contracting volumes in response to unprofitable conditions.

📊 Fundamentals

• Krajowa Spółka Cukrowa, Poland’s largest sugar producer, faces a 300 million PLN loss this year.
• Acquisitions of Polish sugar factories by German multinationals shift further production out of local control toward broader EU and Ukrainian alliances.
• Europe, Israel, and a few other regions rely on beet sugar—contrasting the global dominance of cane sugar elsewhere.

☁️ Weather Outlook & Yield Impact

• Ukrainian sugar beet yields are strong due to investments in modern agronomy and infrastructure, helping sustain high export volumes.
• Western EU (including Poland) is seeing typical winter weather; no major short-term yield threats reported, but cost inflation (fertilizers, energy) lingers as a key risk to spring plantings and upcoming season profitability.

🌏 Global Production & Stocks

Country	2025/26 Production (est., mln t)	Stock Change	Notes
Ukraine	↑ (rising)	Up	Modern plants, expanding acreage
Poland	↓ (falling)	Down	Contracting, higher costs, volume cuts
Germany	Stable	Even	Increasing Ukrainian integration
France	Stable	Even	Competitive imports from Ukraine
EU (overall)	Under pressure	Mixed	Smaller market for white sugar

📆 Trading Outlook

• Expect continuing downward pressure on continental European beet sugar prices due to persistent Ukrainian supply.
• Contracting at Polish and other EU beet sugar plants likely to remain cautious or reduced for the 2026/27 season.
• Producers should consider strategic alliances or risk management tools to hedge margin erosion.
• Traders may find short-term arbitrage opportunities in regions less affected by Ukrainian supply influx or with premium for non-EU origin sugar.
• Alternative raw/cane sugar origins may find improved access to the EU if beet producers continue to contract.

📅 3-Day Regional Price Forecast

• LT (Mirijampole): Stable at 0.48 EUR/kg
• GB (Norfolk): Stable at 0.45 EUR/kg
• UA (Vinnytsia Oblast): Competitive, small downside to 0.43-0.44 EUR/kg possible
• CZ (Vyškov): Likely stable at 0.44 EUR/kg, risk of further slight downside if Ukrainian overhang increases
• DE (Berlin): Stable at 0.48 EUR/kg