Sugar-maker Ouvre has halted operations due to technical and financial problems and asked farmers to sell their beets to larger producer Cristal Union, letters seen by Reuters showed, marking the sixth French sugar plant closure in as many years.
France is the European Union's largest sugar producer but a series of poor harvests, caused by adverse weather and diseases, has deterred some farmers from growing beets, cutting supplies for sugar makers. More recently a fall in sugar prices has hit profits.
Family-owned Ouvre, which operates one sugar plant located in Souppes-sur-Loing, south of Paris, with an output of about 60,000 metric tons of sugar per year, said in a letter on Friday that unspecified technical problems and damage had forced it to halt production early in the season.
It has asked Cristal Union, France's second largest producer that has several sugar refineries in the region, to process the sugar beet harvested by its members in 2024/25.
"Today we have to accept it: a restart of the sugar factory cannot reasonably be assured at this time," Ouvre said in its letter to farmers, adding that it had reached a deal with Cristal Union for the upcoming campaign.
Cristal Union said in a separate letter to its cooperative members that the deal would allow Ouvre farmers to deliver their sugar beets for processing "from the 2025 campaign onwards".
An industry source, speaking on condition of anonymity, said the plant was unlikely to resume after two years without production.
Ouvre did not immediately respond to a request to comment and Cristal Union declined to comment.
Slump In Prices
The Ouvre stoppage coincides with an expected reduction in sugar output across France over the coming season and a fall in sugar prices.
European sugar prices dropped 30% in the year to November to hit a two-year low of €599 per tonne, according to the latest available data. Global sugar prices LSUc1 traded near three-year lows on Tuesday.
Saint-Louis Sucre, the French branch of Europe's largest sugar maker Südzucker, told its members on 24 December it would reduce the area for the 2025 harvest by 15% due to lower European sugar prices and high Ukrainian imports.
It was unclear whether Ouvre's plant would reopen after the 2025/26 season.
A permanent closure would bring the number of sugar factories in France to 19 from 25 at the end of last decade. Saint Louis Sucre and Cristal Union have both shut two and Tereos has shut one.
The overall impact on France's sugar output - about 4 million tons per year - is likely to be minimal as most farmers are expected to deliver their beets to Cristal Union or Tereos, which is also courting Ouvre's growers.
