Europe acts to free up sugar

24 February, 2011

Faced with spiraling prices and low stocks, EU member states have backed the European Commission initiative to release 500,000 tonnes of out-of-quota sugar onto the domestic market.

An EU sugar management committee meeting today also backed a move to open a duty-free import quota for 300,000 tonnes of raw or refined sugar in early March, according to confectionerynews.com.

In December, British Baker reported that bakers looking to negotiate new sugar contracts were being told by suppliers that they had nothing to sell them, as Europe faced massive shortages of white sugar. The lack of availability, coupled with the impact of bad weather in cane-growing countries, such as Thailand and Brazil, pushed global sugar prices up to 30-year highs.

In a meeting at the end of January, the Management Committee for the Common Organisation of Agricultural Markets told member states (MS) that necessary legislative proposals for two measures were being prepared in response to the tightening sugar supply situation: the disposal on the internal EU market of the quantities of out-of-quota sugar that have not been committed yet; and the facilitation of sugar imports from third countries (non-EU countries) at reduced duty.

On its initiative to release 500,000 tonnes of out-of-quota sugar, the Commission stressed that the measures were in response to exceptional market circumstances, which have seen supply shortages across the EU, with world market prices at above average EU levels.

Licences for the “out of quota” sugar would be released based on weekly applications. However, a 500€/t penalty would be incurred if the volumes were not filled. The import quota, open to all third countries would be managed on a monthly basis.

Before Christmas, the EU indicated that it would be issuing 350,000 tonnes of export licences, meaning that a big quantity of sugar would exit the EU. The Committee of European Users of Sugar (CIUS), which represents the interests of food and beverage sugar users, called for this sugar not to be exported and to be made available to EU consumers.

>>Short stocks force sugar suppliers to raise prices

>>UK bakers face dilemma as sugar supplies run dry





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