Sugar producers face the prospect of a further cut in their contracted tonnage in 2008/09 as Brussels has failed to recoup all the quota it was after under the EU restructuring scheme.
With just two days left for EU processors to avail of the €730/t (£496/t) on offer, the Commisison today admitted it was way off target.
“On several occasions I alerted sugar operators and member states to the risks arising from a failure to reduce production quotas under the terms of last year’s reform,” said EU agriculture commissioner Mariann Fischer Boel.
“I have been quite clear that unless much more quota was renounced, the consequences would be very substantial.”
Brussels had hoped to recover some 6m tonnes over four years, to avoid having to dispose of surpluses with the aid of illegal export refunds.
But in the first two years of the scheme it has recouped just 2.15m tonnes – mostly from the Czech Republic, Greece and Hungary.
To deal with the fact the EU will have too much sugar at the end of the season, the commission has announced a “withdrawal” of some 2m tonnes, or 12% of quota,
This sugar, produced in 2007/08, mustl either be counted against 2008/09 quota, or diverted to industrial use, such as bio-ethanol production.
A spokesman for British Sugar said the announcement was not a surprise. “We have known for some time there was too much sugar about in Europe.”
He insisted that any quota reductions would not impact on this year’s production, under agreement with the NFU.
It remained to be seen whether British Sugar would be able to offset any future cuts by diverting the sugar to biofuel production.