Sugar prices may rise sharply due to crop failures in Europe
Europe is facing its worst sugar beet harvest in nearly 40 years due to drought and extreme heat. Sugar production in the 2026/27 season could fall to its lowest level since 1988/89, and shrinking inventories are already pushing prices higher. This is also significant for Ukraine, as the area planted with sugar beets this year has shrunk to a historic low.
European farmers have faced extremely unfavorable weather. After a relatively good start to the season, a prolonged drought began in many regions in mid-June. It was accompanied by high temperatures and several heat waves. Due to the lack of rain, sugar beets were unable to develop normally. The most significant problems are currently being observed in France, but the unfavorable weather has also affected other European countries.
According to estimates by the French company Tereos, beet yields in the 2026/27 season could be more than 20% lower than last year. In some regions, the drop in yields is already estimated at 50–60%. The expected harvest is also about 15% below the average for the last five seasons. For the sugar industry, this means one simple thing: there will be significantly less raw material for sugar production.
Europe risks record-low production
Problems with sugar beets are already affecting forecasts for the entire European sugar market. Tereos expects sugar production in the 2026/27 season to be the lowest since 1988/89. If this forecast holds true, the European industry will return to production levels not seen in nearly four decades.
Moreover, the current drought is not the only problem. In recent years, the acreage that farmers set aside for sugar beets has been shrinking across Europe. Over the past three years, planted acreage has decreased in France and other European countries. Consequently, this year’s poor harvest has occurred against the backdrop of an already shrinking production base.
Sugar Prices Are Already Rising
Lower supply is gradually affecting prices. After two years of decline, the price of sugar in Europe has begun to recover. As the beet harvest shrinks, processors receive less raw material. At the same time, stocks of finished sugar are dwindling. This puts additional pressure on prices.
Tereos expects that the situation on the global market may also contribute to the rise in European sugar prices. The combination of low inventories in Europe and higher global prices could lead to a further increase in product costs. Farmers will not be able to quickly remedy the situation. Even if prices rise, it is practically impossible to increase production in a single season. This would require new acreage and, most importantly, favorable weather conditions.
France Is Hit the Hardest
France is one of Europe’s leading sugar beet producers. Therefore, what happens in its fields affects not only the French market but the entire European market as well. The condition of the crops varies by region. The situation is most difficult in areas where the drought lasted the longest and temperatures were particularly high.
At the same time, Tereos emphasizes that the problem is not limited to France. Weather conditions are worsening harvest prospects in several European countries. This could further reduce the overall supply of sugar on the continent.
What This Means for Ukraine
Ukraine will also feel the effects of changes in the European market, as it remains a major producer and exporter of sugar. At the same time, the Ukrainian sugar industry itself has faced a reduction in planted acreage this year. According to the Ukrtsukor association, approximately 162,100 hectares were planted with sugar beets in Ukraine in 2026.
This is 18% less than the previous year and the lowest figure since 1991. Thus, both Ukraine and Europe have less land under sugar beets this year. If the European harvest turns out to be as poor as predicted, EU countries may need more imported sugar.
For Ukrainian producers, this could mean additional demand in foreign markets. At the same time, for consumers, the reduction in supply signals a risk of further price increases. This is reported by the French company Tereos.
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