Sugar is one of the foodstuffs whose prices have skyrocketed the most in recent years. However, the world market price for sugar is currently moving in the opposite direction: retailers have cut sugar prices by up to a third. For this reason, Südzucker Group is forced to adjust its annual targets.

Difficult Market Situation Forces Südzucker to Adjust Its Targets

Südzucker has had to significantly lower its forecast for the financial year running until the end of February 2025 due to the weak sugar market. Losses are expected in the sugar segment in particular. The Group is confronted with increased sugar volumes on the European market and falling prices on the global market.

Retailers Lower Prices

Consumers are benefiting from the current price trend: a number of discounters and retailers have significantly reduced their sugar prices. A kilo of sugar now costs 89 cents at Aldi Nord, Aldi Süd, Edeka and Netto instead of the previous 1.49 euros. Kaufland and Lidl have reduced the price to 99 cents, while Rewe, Penny and Norma have announced similar price reductions. The prices of icing sugar and gelling sugar will also fall in the coming weeks.

Historical Price Trends

Food prices in Germany have risen significantly in recent years, with sugar being hit particularly hard. In August 2024, a kilo packet of sugar cost 82 per cent more than four years previously. This was due to rising energy, raw material and labour costs. The price of sugar on the European domestic market peaked at € 856 per tonne in December 2023.

Influenced by Crude Oil and Harvest Prospects

According to industry experts, factors influencing the current price trend are the price of crude oil and the harvest prospects for sugar cane in countries such as Brazil, Thailand and India. The price of sugar on the London Commodity Futures Exchange has fallen by 20 per cent in the last twelve months to currently $520 per tonne, or around EUR 469.

Losses expected at Südzucker

The fall in prices will result in lower revenues for Südzucker. Instead of the originally expected 10 to 10.5 billion euros, the group now expects sales of 9.5 to 9.9 billion euros. The operating result (EBITDA) is estimated at EUR 550 to 650 million, which is itself at the upper end of the range and would only halve last year's figure.

Südzucker expects to be in the red in the sugar segment in the second half of the year, as the fall in prices has recently accelerated sharply. Originally, a profit of 200 to 300 million euros had been forecast.

Business Development in the Second Quarter

In the second quarter of the current financial year, which ended at the end of August, Group sales totalled around 2.5 billion euros, slightly below the previous year's level. EBITDA halved to 190 million euros. The operating result slumped by almost two thirds to 115 million euros. The final quarterly figures will be published on 10 October.

Click here to reach our trading platfrom CMBroker