DUBAI (Reuters) - The European Union will likely see a further decrease in planted sugar beet this year following the closure of some factories, participants at the annual Dubai sugar conference said on Wednesday.
Sugar production in the trading bloc has fallen for two successive seasons after an initial surge after the EU abolished production quotas in 2017.
Prices collapsed as the initial rise in production forced the EU to try to compete in a depressed global market, leading to heavy financial losses for many EU producers and the closure of some factories.
French co-operative Cristal Union announced last year is was closing two sugar factories in France while Suedzucker (DE:SZUG) said it would close two factories at its French branch, Saint Louis Sucre.
"Planting will decrease because we closed four mills," Pierre Raye, director of the General Confederation of Beet Growers (CGB), said adding that the situation varied significantly between companies and regions.
Marcello Moreira, head of market research at French producer Tereos, said he did not expect any decrease in the acreage for his company while noting other players in the French market could see a fall.
"When you look into Europe, you have a mixed scenario but the net will be a decrease of around 2% in acreage," he said.
Prices have rebounded as production has fallen in the EU and the trading bloc has become a net importer, leading to an improvement in the financial outlook for producers.
"Prices are recovering finally. It was blood and sweat, it wasn't an easy process," said Kona Haque, Group Head of Research at ED&F Man.
France and Germany are among the world's top producers of sugar beet, which is grown in temperate climates. Sugarcane is grown in tropical and subtropical zones.
EU farmers also face the challenge of growing sugar beet using seeds which haven't been treated with a class of insecticides known as neonicotinoids, which have been banned to protect bees.
"They (farmers) have limited choices to fight aphids and as you see more restrictions... Farming is becoming more challenging," Moreira said.
Raye said the restrictions put EU farmers at a disadvantage.
"Do we have the same playing field as the rest of the world? The answer is no. Do we ban imports of sugar beet that use neonics? The answer is no," he said.
"This year the weather is mild in Europe and it's not a good signal for control of the aphid population."