France's largest sugar and ethanol group Tereos raised the price at which it will buy sugar beets from its cooperative members by 40% from last year, as it aims to pass on improved results amid soaring European sugar markets.
In a letter sent to its 12,000 cooperative members on Tuesday, Tereos said it would pay for the 2022 harvest €41.85 ($40.88), premium included, per tonne of sugar beet based on a sugar content of 16 degrees, up from €29.90 last season.
The price hike was linked exclusively to improved industrial and commercial performances at Tereos' French sugar business unit, it said, adding that it had recorded a significant rise in its average selling price compared to 2021.
Tereos had previously said it would do "at least as much" as its competitors in France. Cristal Union and Südzucker's branch in France, Saint-Louis Sucre, announced prices of €35 and €35.50 per tonne respectively.
Tereos is the world's second-largest sugar producer by volume thanks to its sugar cane activities in Brazil.
European sugar prices are trading at record highs, nearly three times the levels seen a year ago following extreme weather and a surge in energy costs, which has raised concern for the baking and confectionary industry.
The sugar beet harvest is in full swing in France but showing disappointing results after a severe drought hampered crop development. The farm ministry earlier this month said it expected the national yield to fall 6% compared with the five-year average.
Tereos said it expected yields to be close to the five-year average, although with heterogeneous results, and to record an average sugar content of 18.2%.