Europe's largest sugar refiner, Südzucker, expects increased operating profits in its third quarter, driven by higher sugar prices.
The company also confirmed in a statement its outlook for the full fiscal year 2023/24 which was raised in October.
Südzucker said it expects operating profit in the third quarter ending 30 November 'to be significantly higher' than the previous year's level of €220 million.
"We remain in a very positive environment in our sugar sector, with higher prices than last year,” a spokesperson told Reuters. “Südzucker has been able to recover the higher costs we face, including for energy, logistics and packing in the sugar market.”
“We remain optimistic, with a good sugar harvest also being gathered for processing this autumn and winter while demand remains strong.”
Raw sugar futures hit 12-year highs on 7 November, with supply tightness expected to continue as an El Nino weather event curtails production in major producers India and Thailand.
Germany's sugar production this season is set to rise 9.8% on the year, the country's sugar industry association has said.
In October, Südzucker said second quarter profits had more than doubled.
It said results still depended on the impact of market volatility caused by the war in Ukraine.
"Heavy sales of Ukrainian sugar in the EU remain a problem after the EU gave special duty-free access to its markets for some Ukrainian agricultural products,” the spokesperson said.
“Estimates are that Ukraine will sell about 500,000 to 700,000 (metric) tonnes of sugar in the EU market this year, against about 20,000 tonnes previously, which will have a distorting impact on market demand,” he said.
Südzucker will announce quarterly results on 11 January.