Sugar is rebounding from its lows, lentils are showing the first signs of recovery, and Italian extra virgin olive oil is down 47% in a year. Areté outlined a picture of contrasting trends in its October 9th update, with production prospects, inventories, and international demand pushing agri-food commodity markets in different directions.
In September, spot sugar prices in Europe and delivered sugar prices in Central and Northern Italy reached their highest levels since October 2025, marking increases of 20% and 19%, respectively, compared to the multi-year lows of February. The uptick was primarily driven by expectations of a contraction in European production in the 2026/27 crop year, exacerbated by the effects of drought and high temperatures on sugar beet crops.
In France, Agreste estimates a 29% reduction in sugar beet production, while in Germany, Destatis indicates a 14% decline in acreage, higher than the 12% forecast by the European Commission. The latest MARS bulletin also revised European yields down by 7% compared to July, now expected to be 17% lower by 2025 and 11% lower than the five-year average.
These factors increase the risk of further cuts in sugar production, already forecast at multi-year lows. Stocks, which at the end of July were at their highest levels in over eight crop years, partially offset the lower supply. However, the prospect of a net importing European Union in 2026/27 remains, for the first time since the 2022/23 crop year.
Lentils are also changing direction after the sharp decline of the last season. In Canada, over the past two months, the prices of large green lentils have increased by 9%, those of small green lentils by 20%, and those of red lentils by 5%. Large green lentils have thus returned to being more expensive than red lentils, reestablishing the traditional relationship between the two types.
According to Areté, the increases reflect expectations of lower North American production following the record highs in 2025 and growing Indian demand. Further support could come from the elimination of import duties, a measure currently under discussion in the country.
The trend for extra virgin olive oil is in contrast. In 2026, EU prices returned to their lowest levels since 2022, while those for Italian olive oil have fallen by 47% over the past year. The premium for domestic olive oil compared to EU olive oil has fallen from over €5.300 per ton in June 2024 to just over €900 in September 2026.
The decline is primarily due to stocks rebuilding after two seasons marked by significant production deficits. The first official Spanish estimates for 2026/27 indicate a harvest of 1,6 million tonnes, a 29% increase. If confirmed, this would bring overall early-season availability to its highest level since 2021/22.
However, normalization remains subject to several uncertainties. Weather will be crucial for Spanish yields, while Italy and Tunisia are expected to experience a decline in production. Lower prices could also boost consumption, while resistance to sales by Spanish producers, struggling with prices close to production costs, could contribute to further fluctuations.
