| Marketing relationshipB2B and B2C | ProductsSugars and sugar specialty products, by-products (feedstuffs and fertilisers) | Raw materials processedSugar beet, and raw sugar from sugar cane |
| Key marketsAustria, Hungary, Romania, Czech Republic, Slovakia, Bosnia and Herzegovina (Western Balkans region), Bulgaria | CustomersDownstream manufacturers (particularly confectionery, beverage and fermentation industries), food resellers (for consumer products) | Special strengthsHigh product quality standards; product offering tailored to customer needs |
In 2023|24, revenue in the Sugar segment rose by a significant 24.3% to € 1,071.3 million. Achieved despite lower sales volumes, this growth was driven by a considerable rise in sugar selling prices; their trajectory was very positive both in the reseller business (wholesalers and retailers) and the industrial market. Revenue with by-products was slightly below the previous year’s level, despite higher sales volumes. The Sugar segment generated 28.3% of the Group’s revenue (prior year: 23.7%).
The Sugar segment’s earnings measure of “operating profit before exceptional items and results of equity-accounted joint ventures” improved despite a steep increase in beet prices. However, a very significant reduction in the profit contribution made by joint ventures (which was down € 8.0 million from the prior year), combined with negative net exceptional items in connection with severance pay (change from prior year: € –3.2 million), led to a decrease of 13.3% in segment EBIT to € 40.4 million. AGRANA’s share of the profit of the equity-accounted AGRANA-STUDEN group was € 1.7 million, far below the previous year’s historic high of € 9.9 million. The reasons for this included a higher sales share of resold, lower-margin sugar, and underutilisation of the refinery in Bosnia and Herzegovina. The equity-accounted share of the result of Beta Pura GmbH, Vienna, was a deficit of € 2.2 million (prior year: deficit of € 2.3 million).
Further details on the results of the Sugar business are given in the segment report in the full version of the annual report.
The geopolitical situation and the weather had a significant impact on sugar trading and the supply-and-demand dynamics in the sugar market in the 2023|24 financial year. World market prices fluctuated correspondingly strongly.
In its March 2024 estimate of the world sugar balance, after three successive years of sugar deficits, the market research company S&P Global showed a small surplus of 0.7 million tonnes of sugar for the completed 2022/23 sugar marketing year (SMY), which ran from 1 October 2022 to 30 September 2023. With demand steady, there was a minimal increase in stocks due to a rise in production.
World sugar balance1 | 2023|24 | 2022|23 |
|---|---|---|
| Million tonnes, except % | SMY | SMY |
| Opening stocks | 66.2 | 65.5 |
| Production | 194.3 | 189.0 |
| Consumption | (189.0) | (187.4) |
| Net exports/imports | (0.1) | (0.9) |
| Closing stocks | 71.4 | 66.2 |
| In % of consumption | 37.8 | 35.3 |
1 S&P Global; estimate of the World Sugar Balance, dated 15 March 2024.
For the new SMY 2023/24, which began on 1 October 2023, S&P Global expects a significantly growing world sugar surplus as a result of the production increase.
The estimated surplus for SMY 2023/24 is attributed to an exceptional harvest in Brazil (the most important supplier of the global market) and higher production in the EU and Russia, contrasting with lower production volumes in Thailand.
In the 2023|24 financial year, the upward trend in sugar prices initially continued, peaking at the beginning of December 2023. When speculative funds then liquidated the majority of their long positions, prices fell substantially to the levels seen at the start of the financial year.
On 29 February 2024, white sugar quoted at US$ 615.1 per tonne and raw sugar stood at US$ 478.2 (year earlier: US$ 562.4 and US$ 486.8 per tonne, respectively).
In SMY 2022/23, which ended on 30 September 2023, sugar production in the EU-27 countries (excluding isoglucose) declined to 14.6 million tonnes (SMY 2021/22: 16.6 million tonnes), reflecting both a further slight reduction in sugar beet acreage and below-average yields due to the drought in summer 2022. The EU thus remained a net importer of sugar in SMY 2022/23. For the 2023/24 sugar marketing year now underway, the European Commission predicts a slight increase in planting area and high beet yields, but low sugar content. Sugar production is expected to increase to 15.8 million tonnes as a result, which would leave the EU a net importer of sugar despite rising exports and stocks. For SMY 2024/25, market observers expect a slight increase in beet planting area in the EU-27.
According to EU price reporting, average white sugar prices in the EU rose steadily from the beginning of the 2023|24 financial year, from € 804 per tonne in March 2023 to € 856 per tonne in December 2023, and eased to € 837 per tonne in February 2024 as of the latest available publication. Within the EU, there were significant regional price differences between the deficit and surplus regions. The deficit markets were under pressure from low-price imports from Ukraine and the price gains especially in the Romanian and Bulgarian markets therefore lost momentum in the summer.
Since June 2022, there has been an EU arrangement allowing duty-free sugar imports from Ukraine, which was extended in spring 2023 to the beginning of June 2024. While Ukraine only had duty-free access to the EU market for about 20,000 tonnes before the war, duty-free sugar imports rose to approximately 415,000 tonnes in SMY 2022|23. The renewed extension of the EU special arrangement on imports of agricultural products from Ukraine to the EU, valid from 6 June 2024 to 5 June 2025, now includes an import restriction to protect sensitive products, including sugar. The average import levels for calendar years 2022 and 2023 and the second half of calendar year 2021 are used as the basis for this limit. For duty-free sugar exports from Ukraine to the EU, the new cap from 5 June 2024 is therefore in the general region of 265,000 tonnes for the calendar year 2024; for the period from 1 January to 5 June 2025, the cap is prorated on that basis.
Some important trade agreements, such as with the Mercosur countries and with Australia, have been delayed or are currently frozen, notably because certain issues relating to environmental protection and rules of origin have not yet been settled.
The sugar beet acreage planted by the approximately 5,500 AGRANA contract farmers (prior year: approximately 5,300 farmers) in the 2023/24 sugar marketing year was about 86,000 hectares, an increase from the prior year’s 72,000 hectares. Growing conditions in 2023 were characterised by a cold, wet spring and dry summer months. Sufficient rainfall in mid-August significantly improved the yield prospects. The second half of the growing season was marked by a dry September. This was followed by a period of damp and cool weather from the end of October to late November.
Cercospora leaf spot disease caused localised problems in the westerly, more humid areas. However, more significant crop losses were prevented through the by now high proportion of varieties resistant to leaf disease. Due to damp, cool weather in April and May 2023, the incidence of beet weevil was lower than in the previous year, but still led to problems and the turning under of some acreages in the usually more affected regions (Austria’s northern Tulln Basin and Weinviertel areas). It is relevant in this context that in the 2023 crop year, for the first time, sugar beet seed treated with neonicotinoids could not be used in Austria, as no emergency authorisation had been issued. With the in some cases abundant precipitation in the autumn months, some of the beet harvest took place in wet conditions, which resulted in higher deductions for soil clinging to the beet compared to the previous year.
The growing conditions described were the key reason for a mean sugar content of 16.2% (prior year: 16.1%), in line with the multi-year average. Around 5.7 million tonnes of sugar beet (prior year: 4.7 million tonnes) were harvested from a total area of about 86,000 hectares, corresponding to an average yield of 67 tonnes per hectare (prior year: 66 tonnes per hectare).
AGRANA’s seven beet sugar factories processed a combined daily average of slightly more than 48,200 tonnes of beet during the campaign (prior year: 47,800 tonnes). Thanks to the higher beet quantity, the factories produced a total of 806,000 tonnes of conventional sugar (prior year: 717,000 tonnes), in a campaign averaging 119 days in length (prior year: 101 days). Additionally, at the plant in Tulln, Austria, slightly more than 4,200 tonnes of organic sugar was produced in a one-week organic campaign. As a result of the beet processing volume, the average capacity utilisation of the sugar factories was 99% (prior year: 85%).
At the plant in Tulln, a molasses desugarisation facility was operated year-round. AGRANA also operates two raw cane sugar refineries, in Bosnia and Herzegovina and in Romania; in the 2023|24 financial year, these produced a total of 286,000 tonnes of white sugar (prior year: 290,000 tonnes).
In the Sugar segment, AGRANA invested € 34.4 million (prior year: € 34.2 million) during the 2023|24 financial year, primarily for the following projects:
Additionally in 2023|24, € 3.3 million (prior year: € 1.5 million) was invested in the equity-accounted joint ventures (the AGRANA-STUDEN group and Beta Pura GmbH, Vienna; values for these entities are stated at 100% of the total).
