Food manufacturers are eager to settle annual sugar contracts earlier than usual this year, but so far sugar suppliers are reticent to commit.

Sugar industry sources said manufacturers were looking to settle contracts for the new marketing year starting in October four to six weeks earlier than normal because prices had tumbled to new lows. But they warned sugar suppliers were reluctant to sign deals because prices had fallen so far they were now only likely to rise.

“There is no shortage of sugar, but there’s a question mark over who will supply it,” said one source. “At the moment, it’s a waiting game.”

According to the latest EU data, prices have fallen 21% over the past year to €574 a tonne - the lowest level since September 2011. And forward prices for the coming year in the UK have fallen even further, according to industry sources, to little more than €500 a tonne.

Prices have slumped because of increases to the EU’s beet quota and an excess of sugar built up following good sugar beet harvests. In a trading update last week, British Sugar owner ABF said it had started negotiations for 2014/15, and indications were prices would be lower than previously expected.

Sources said that Continental sugar suppliers were among the first to offer prices for 2014/15, as they were once again pushing hard to gain market share in the UK. Last year buyers also reported French and German producers were aggressively seeking share in the UK, adding “much-needed competition” in a market dominated by British Sugar, Napier Brown and Tate & Lyle Sugars.

In what one buyer called “gunboat diplomacy,” the biggest sugar producers are looking to win share and drive out smaller, weaker suppliers across Europe ahead of the abolition of EU sugar beet quotas in 2017.