PRICE CUTS of 39% for sugar and 43% for beet are the absolute minimum needed to maintain balance in the market, says a senior EU official.
The recent WTO ruling against EU subsidised sugar exports would result in at least 6m tonnes more sugar looking for a home in the EU, said deputy director general of agriculture at the commission, Lars Hoelgaard.
The 33% price cut suggested last year would be insufficient, he told a special forum organised by merchant bank Lehman Brothers.
“We were considering cuts of 42% or 45%, but decided that 39% was the minimum needed to ensure balance is achieved.”
Combined with the E4bn (£2.8bn) industry-funded restructuring scheme, he estimated this would take out enough EU domestic production.
But Jean-Claude Tyack from the Mauritius Chamber of Agriculture said these price cuts were “too soon, too deep and too quick”.
Mauritius is one of 18 African, Caribbean and Pacific countries that enjoy preferential access to the EU for cane sugar.
“The WTO ruling does not justify such cuts,” he told the seminar.
But Australian ambassador to the EU Peter Grey derided the commission’s sugar reform proposals as “perverse”.
The world’s most efficient sugar producers in Brazil and Australia would still be excluded from the EU by tariff barriers, while EU beet growers would continue to receive twice the world price of sugar.