European sugar crisis imminent?

26 February, 2016

A sugar supply crisis in Europe is almost certain, bakers have been warned.

The EU needs to take action to avoid sugar shortages, according to the Committee of European Sugar Users (CIUS), a group representing more than 15,000 companies. CIUS members purchase and use almost 70% of Europe's annual consumption of sugar.

Sugar supplies must be boosted by the EU, because stockpiles are set to fall below levels from 2009-10 and 2010-11, when users faced a “severe supply crisis”, according to a statement from CIUS. Inventories may drop to a record low if imports fail to meet EU forecasts, it said.

This is not the first time that CIUS has spoken out against EU production quotas, which cap supply to around 80% of its needs. Strict rules govern the use of any production that is in excess of this, known as ‘out-of-quota’ sugar.

Elsewhere, the return of European sugar exports to world markets next year will be one of the biggest changes in the sector since reforms in 2006, when Brussels imposed production quotas and export limits.

Production and export restrictions will be lifted as part of the Common Agricultural Policy reforms, and European sugar groups will be able to produce and export as much as they want.

levies and duties

The committee is calling on the EU to lift levies and duties applied to volumes of beet and cane sugar, made available through access to ‘out of quota’ sugar stocks.

During the 2009 supply crisis, retailers ran out of stocks of sugar for direct consumption. Sugar users were also directly impacted, with some companies having to temporarily suspend production lines or close down their export business.

The EU could make supplies available by allowing producers to sell more in the domestic market, authorising import tenders free of duty, and suspending a levy on import quotas from certain nations, said CIUS. The European Commission’s committee on agriculture markets is scheduled to meet on 3 March to discuss the sugar and grain markets.

Muriel Korter, secretary general of CIUS, said: “The situation is even more critical than in 2010. They [The EU] need to avoid a crisis.”

Earlier this month, the government reportedly abandoned plans to introduce a sugar tax, as part of its ‘obesity strategy’.





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