PARIS (BLOOMBERG) - A crop-disease outbreak is giving Europe's struggling sugar farmers another thing to worry about.

Still dealing with historically low prices and hit by a dry spring that stressed beets after planting, growers now have to contend with the spread of beet yellows virus.

Transmitted by aphids, it could cut sugar production by as much as 25 per cent in France and even more in Germany if conditions don't improve.

Fighting the disease has become harder since the European Union widened a ban on using neonicotinoids - insecticides blamed for killing bees - in 2018.

That's threatening to lower EU production for a third season, after a collapse in prices a few years ago reduced plantings and forced some factories to close.

"It is clear that this will be a huge problem in France and the situation is quite concerning," said Timothe Masson, an agronomist at French growers' association CGB.

"We can no longer expect five-year average yields like before. Even if we have good weather in July and August, it will not help the affected beet to come back to normal shape."

The neonicotinoid ban and a mild winter exacerbated the presence of aphids.

Though the impact varies depending on the region and it's not clear exactly how crops will fare, there's a risk that sugar output in France, the EU's top grower, could drop as much as 25 per cent to 3.3 million tons in the season that starts in October, Mr Masson said.

Losses could reach up to 30 per cent in Germany and 50 per cent in Belgium, beet groups VSZ and CBB said.

"This is an exceptional situation which we have not seen in our country for 30 or 40 years," said Peter Haegeman, secretary general of Belgium's CBB.

"The economic consequences for growers are dramatic. The continuing dry weather was already an important risk factor. The yellows virus could come on top of this."

Another disappointing year for the region's farmers will encourage them to sow less in future, which would mean fewer beets to process and potentially more factory closures, said Fred Zeller, managing director of German beet group VSZ.

Still, tighter supplies going forward should support EU prices, according to Francois Thaury, an analyst at Paris-based adviser Agritel.

Germany's Suedzucker AG said in May that the region's prices should rise next year amid a deficit, while fellow producer Nordzucker AG also expects the market to improve from unsustainable levels.

Farmers switched to alternative insecticides to try to prevent beet yellows virus, but they're not as effective as neonicotinoids, VSZ's Zeller said.

Although growers had anticipated increased occurrence of the disease, the speed and magnitude has surprised many, he said.

"It's like you see the tsunami coming toward you, but you don't know when it will hit you and at what speed," he said.

"It's a very frightening situation in Germany. What's really shocking is seeing infestation visible in Germany three to four weeks earlier than normal. This shows crop yield damage will be higher."