(Reuters) -Europe’s largest sugar refiner Suedzucker expects increased operating profits in its third quarter, driven by higher sugar prices, it said on Wednesday.
The company also confirmed in a statement its outlook for the full fiscal year 2023/24 which was raised in October.
Suedzucker said it expects operating profit in the third quarter ending Nov. 30 “to be significantly higher” than the previous year’s level of 220 million euros ($239.07 million).
“We remain in a very positive environment in our sugar sector with higher prices than last year,” a spokesperson told Reuters. “Suedzucker 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 Nov. 7 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 will rise 9.8% on the year, Germany’s sugar industry association said on Wednesday.
Suedzucker in October said second quarter profits had more than doubled.
It said on Wednesday 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) tons of sugar in the EU market this year against about 20,000 tons previously, which will have a distorting impact on market demand,” he said.
Suedzucker will announce quarterly results on Jan. 11.
(Reporting by Anastasiia Kozlova, Amir Orusov and Michael Hogan, editing by Linda Pasquini and Elaine Hardcastle)