Cut sugar quota or lower prices

By FWi Staff

CUTS in sugar quota are expected in new proposals for reforming the sector from 2001, due to be released in Brussels later this month.

Addressing the European Parliaments agriculture committee this week, farm commissioner Franz Fischler said the EU faced two options to lower prices or cut quotas.

With world sugar values on the floor, at about 200/t (122/t) compared with an EU rate of 600/t (366/t), lowering prices to meet GATT requirements would cause major disruption to the internal market, said Mr Fischler.

Cutting quotas, however, would enable the EU to curtail its exports, which would have the added benefit of increasing world prices. There seemed little doubt which option he preferred.

About 500,000t could be removed almost 3.5% of EU quota. That is slightly more than this years reduction, thought to be about 3% and due to be finalised soon. Contract tonnage for the current campaign will be reduced by the same percentage, says British Sugar.