Plummeting sugar prices resulting in diminishing profits for sellers. - Decline in Profits for Sugar Company Due to Price Drops
In a recent financial report, Südzucker, the German sugar and food company, announced a significant **profit drop in the first quarter of fiscal 2025/26**, primarily attributed to a sharp decline in sugar prices and reduced export volumes.
The sugar segment's revenues plummeted by 34.6%, from €1,076 million to €704 million, reflecting the primary impact of the price drop. This segment recorded an operating loss of €-56 million compared to a profit of €59 million in the previous year. Despite the company's efforts to reduce production costs significantly during the 2024 campaign, these savings were not enough to counteract the impact of the substantial price decline. As a result, the group’s consolidated operating result plummeted from €155 million to €22 million, with EBITDA falling from €230 million to €96 million[1][2].
Regarding the **outlook for sugar prices in the EU**, while the report does not provide explicit future price projections, the reported downturn connected to lower sugar prices and decreased exports suggests a challenging market environment. Moreover, sources mention a **decrease in sugar production expected**, which could influence future supply dynamics and potentially stabilise or increase prices depending on demand and policy factors[2].
The Mannheim-based company has confirmed its forecast for the current fiscal year, which includes the recovery of EU sugar prices. However, the company's outlook for the current quarter remains gloomy. Revenue decreased to €2.15 billion, a significant drop from the previous year[1].
In summary, Südzucker is facing tough market conditions in sugar, with the immediate outlook marked by lower revenues and profitability due to market price pressures within the EU[1][2]. The company's forecast for the current fiscal year (ending February) remains unchanged, offering a glimmer of hope for a potential recovery in the second half of the financial year.
[1] Südzucker AG (2025). Quarterly Report Q1 2025/26. Retrieved from [2] Reuters (2025). Südzucker forecasts EU sugar price recovery, reports Q1 loss. Retrieved from
The community and employment policies of Südzucker may need to be reevaluated amidst the challenging market conditions in the sugar industry, as the company faces a significant profit drop in the first quarter of fiscal 2025/26 due to a sharp decline in sugar prices and reduced export volumes. The finance sector will closely monitor the company's progress, particularly its efforts to adjust production costs and recover EU sugar prices as outlined in their forecast for the current fiscal year.
