Sugar processors allowed to offload surpluses

EU sugar processors are to be allowed to export an extra 500,000t of sugar to the world market, to help ease the current world shortage of sugar while reducing the EU’s own surplus.

Under WTO rules, the EU is normally only allowed to export 1.374m tonnes of sugar a year. But following a bumper harvest, the current EU surplus is estimated at 2.4m tonnes.

With world sugar prices now at over €500/t following poor harvests in India and Brazil, compared with an EU reference price of €404/t sugar beet growers and processors have been calling for some time for extra export licences.

And this week the EU Commission indicated that it would allow an additional 500,000t of sugar to be exported by the end of July, as a one-off measure.

“The current situation on the world market is exceptional,” said EU agriculture commissioner Mariann Fischer Boel. “With production below consumption and diminishing sugar stocks, sugar prices have risen to unprecedented levels, to the detriment of consumers in poorer countries.

“The price situation on the EU and world market is such that out-of-quota sugar produced in the EU can be exported without violating the EU’s WTO subsidy commitments.”

The EU Commission has also decided that it is not necessary to apply a final quota cut in order to reach a structural balance on the EU sugar market.

It notes that almost 6m tonnes of surplus capacity has now been removed under the voluntary restructuring programme introduced in 2005 – close to it’s original target.