KGS 2027 beet terms trigger dispute with Polish growers over prices and contract cuts
KGS has proposed €26 per tonne for contracted sugar beet in 2027, 40 zlotys per tonne for surplus roots and a possible contract-volume cut of up to 10%. Growers warn that the terms could discourage planting, while the state-controlled producer points to high sugar stocks, falling prices and its financial losses.
KGS opens negotiations with lower terms
Poland’s state-controlled food group KGS has drawn opposition from sugar-beet growers after presenting preliminary contracting terms for the 2027 campaign. Farmer.pl reports that the proposal includes €26 per tonne for contracted beet and 40 zlotys per tonne for surplus roots, alongside a possible reduction in contracted volumes of up to 10% compared with the current year.
The company also proposed lowering the basis used to calculate bonuses for early and late deliveries to €26 per tonne. The charge for comprehensive services would rise to 8 zlotys per tonne. Growers argue that declining purchase prices and rising production costs could make beet cultivation unviable for some farms.
KGS says the proposal presented to the Council of Sugar Beet Growers’ Associations on 24 August is an opening position rather than an agreed contract. It attributes the terms to conditions in the sugar market and its own finances, and says negotiations will continue.
Government questioned over state-owned producer
Member of parliament Magdalena Filipek-Sobczak asked the agriculture and state assets ministries why a state-controlled company was allegedly offering Polish farmers less favorable conditions than foreign-owned sugar groups. The State Treasury owns 84% of KGS, while growers and employees are also shareholders.
The Ministry of State Assets said it was analyzing the management board’s actions but could not issue binding instructions on commercial matters assigned to the board. It nevertheless requested an explanation from KGS. The company said publicly available information indicated that foreign sugar producers operating in Poland were offering about €25-€26 net per tonne for 2027. It did not address claims that competitors may avoid similar contract cuts or even increase volumes.
Stocks and prices tighten the economics
KGS recorded a net loss of 305.8 million zlotys in its 2024/2025 financial year and expects another negative result in 2025/2026. The company says further cost optimization is necessary. European Commission data cited by Farmer.pl put the average EU white-sugar price at €502 per tonne in April 2026, down from €540 a year earlier.
Poland produced a record 2.58 million tonnes of sugar in 2024/25 and 2.57 million tonnes in 2025/26, according to the Agriculture Ministry. Output is forecast to fall by about 20% to 2.0-2.1 million tonnes in 2026/27 because beet area declined by 10% year on year and yields were lower. Poland remains the EU’s third-largest sugar producer after France and Germany, and its annual domestic demand is estimated at 1.8 million tonnes.
Inventories remain the central pressure point. Statistics Poland recorded 1.6 million tonnes of sugar stocks in the first quarter of 2026, 11.7% more than a year earlier, 25.7% above the three-year average and 36.6% above the five-year average. Stocks increased by 605,400 tonnes over five years despite strong exports and reduced imports.
The final decision on reducing KGS contracts will depend partly on actual sugar output in the current campaign. The company says its production exceeded the level implied by contracted beet volumes by 9% in 2024 and 12% a year later; the current campaign’s gap is expected at about 4%. For growers, the negotiations will determine whether beet remains competitive with rapeseed, wheat and maize. For KGS, they will shape factory feedstock supply while it tries to reduce losses in a market still carrying substantial inventories.
