Despite a reduction in sugar beet acreage - a move designed to cut the amount of sugar on the world market - Danisco expects this year's harvest to be above average due to 'exceptionally favourable weather conditions in most of our beet growing countries.'
The ingredients giant reported this week that the first field samples this year of beets - made on 11 August 2003 in Denmark, Sweden, Germany, Finland and Lithuania - reveals that across the board the quantity of beet has risen, as has the percentage of sugar in beet. While 14.9 per cent has been the average over the last five years in Denmark, samples in August this year showed an increase to 17.1 per cent.
Danisco confirmed that the field sample results do not change the previously announced expectations for Danisco Sugar's earnings (EBITA) in the current financial year of DKK 1,050-1,100 million.
Provided that the favourable weather conditions continue during the rest of the growing period, Danisco's total sugar production in 2003 is expected to exceed the company quotas in Denmark, Sweden, Germany, Finland and Lithuania of 1,142,000 tonnes in total.
Improved sugar levels have also been reported by the Belgian national sugar beet institute IRBAB. The group said this week that the second Belgian beet test of the 2003/04 season showed sugar content at 16.15 per cent, up on the 14.84 per cent seen at the same time last year.
Beet growers reduced the total sugar beet acreage by up to ten per cent this year in order to limit the amount of sugar sold on the world market and to take account of the quota reduction that the EU Commission is expected to implement in 2003/04. Each year the EU Commission assesses the need for quota reductions based on the terms and conditions that the WTO has stipulated for sugar exports. A decision on this issue is expected next month at the WTO meeting in Cancun, Mexico.