The sugar production in the European Union (EU) is expected to be significantly reduced for the period 2015/2016. Specifically is expected to be 105.2 million tonnes from 115.6 million tonnes that was last year, as a result of the sizeable stocks in 2014/2015 and the low prices in the international market. These are stated in the European Commission’s short-term outlook report, which was recently published. Basically the production is going to be reduced by 9% compared to 2013/2014. In Greece, where a reduced production is also expected, another sugar factory will re-operate from October. This positive development became known in the midst of Greek economic crisis.
According to the latest European Commission Short Term Outlook, 2014/2015 is confirmed to be an exceptional year for EU sugar production. EU sugar beet production increased by 6% compared to 2013/2014 driven by both a 3% area increase and a 3% yield increase. Moreover excellent weather conditions in the later part of the growing season led to high levels of sugar production. This resulted in an estimated production of just over 19 million tonnes of white sugar, an increase of 16% compared to 2013/2014.
EU prices have stabilized around 417 euros per tonne (April price), a low level compared to the average price of 2013/2014 of 587 euros per tonne. However, both the EU and the world price, around 340 euros per tonne, are under a continuous pressure due to a good world harvest and the strong devaluation of the Brazilian currency (Real).
Despite the fact that this year’s sugar beet cultivated areas in Greece were decreased around 47,000 acres, the different time of sugar beet ripen “cause” the operation of two factories of the Hellenic Sugar Industry. This decision was taken by the Board of Hellenic Sugar Industry and was announced in late June by Mr. Panagiotis Lafazanis, the Minister of Productive Reconstruction at that period. Agrotypos contacted the CEO of Hellenic Sugar Industry, Mr. Dimitris Giannakidis who mentioned that the sugar factory of Platy is scheduled to open in mid-September, while the sugar factory of Orestiada is going to re-open after the 10th of October.
In addition Mr. Giannakidis referred that in July the Administration of Hellenic Sugar Industry proceeds in the recruitment process of about 90 people, while investors are needed to allocate the necessary funds for the reopening of the second Hellenic Sugar Industry factory.
Finally, Mr. Giannakidis said: “The sugar factory of Orestiada will serve the region of Orestiada where about 12,000 acres of sugar beet are grown. According to our plan this factory will operate after the 10-15th of October.
Given the unfavorable situation prevailing in Greece, AgroTypos asked Mr. Giannakidis where the needed funds for the reopening of the factory would be found and he answered: «We are looking for working capital which will be derived from a financial institution or an investor. We are mainly interested in investors within Greece».