UPDATE 1-Tereos Seeks 5 pct Drop in French 2019 Sugar Beet Output

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(Reuters) – Tereos, one of the world’s largest sugar makers, is seeking to cut its sugar beet production next year by 5 percent and has asked its cooperative members to reduce plantings, it said on Thursday, citing difficult market conditions.

A surge in output after the European Union abolished production quotas last year and a 50-percent slump in prices since early 2017 in an oversupplied world market have left many EU sugar firms struggling with plunging profits.

“We are going towards 5 percent reduction in tonnages,” a Tereos spokesman told Reuters. “This is due to market conditions, low prices, high stocks and hefty supplies expected this campaign.”

Tereos members harvested around 19 million tonnes of sugar beet this year, planted on 215,000 hectares, down from “over 20 million tonnes” in 2017, the spokesman said.

The 2018 crop’s area remained stable, but yields were hammered by scorching summer weather.

Last year’s harvest marked a 30 percent rise in output from the previous year, encouraged by the end of the EU sugar quotas.

Tereos sent the letter asking its members to cut 2019 plantings on Thursday, the spokesman said.

Sugar beet are planted in the spring but farmers are currently balancing crops ahead of the 2019 harvest, with winter crops such as wheat, which is sown in the autumn.