British Sugar and its grower base are facing mounting pressure after Associated British Foods warned there is “no evidence yet of a recovery” in the European sugar market next year.
The group said its sugar division fell to a £27m adjusted operating loss in the first half of 2026 as lower European prices hit margins and export sales weakened. The downturn has sharpened concerns across the UK beet sector after a smaller domestic crop and renewed warnings over market oversupply.
ABF said UK sugar production for the 2025-26 campaign was about one million tonnes, down on the previous year because of an intended reduction in acreage. Lower negotiated beet prices partly offset the impact of falling sugar prices.
The results underline growing pressure on the UK sugar industry as growers contend with volatile returns, rising production costs and difficult growing conditions.
Crop threat
The financial pressure comes as UK beet growers battle a difficult spring. The British Beet Research Organisation has warned of heightened virus yellows risk, patchy emergence and growing pest pressure following prolonged dry weather. BBRO said many crops may require a three-spray aphicide programme this season and urged growers not to delay treatment once thresholds are reached.
Reports of flea beetle, thrips and beet moth activity are also increasing across eastern England. Despite the weaker market, ABF said it continued to manage costs and expected the wider group to improve performance in the second half of the year. For UK beet growers, however, the outlook remains uncertain as low European prices continue to weigh on profitability and planting decisions for future campaigns.
Market pressure
ABF said sugar sales fell 9pc in the first half while the division moved from an £8m adjusted operating profit last year into loss. The company blamed “low European sugar prices” and higher production costs.
George Weston, chief executive of ABF, said: “In sugar, the results were below our expectations and given the current market conditions, we are more cautious on the outlook.”
The company warned the European sugar market was likely to remain oversupplied into 2027.
“At this stage of the year, we have limited visibility of the size and quality of the 2026/27 beet crop in Europe, but early indications are that the European sugar market will remain in surplus in 2027,” ABF said. “Given the current market environment, including a lack of visible inflection point in European sugar prices, there is no evidence yet of a recovery in our Sugar business in 2027.”