Proposed measures by the EU Sugar Management Committee look set to ease some of the tension around sugar supply in Europe, as it gears up to vote in Brussels.

Proposals announced earlier in the year to release up to 500,000 tonnes of out-of-quota sugar on to the domestic market have already been voted through, confirmed Peter Hough, business development director at Renshawnapier. However, he said he thought it was unlikely that as much as 500,000 tonnes would be available for release. As British Baker went to press, Hough said the committee was likely to vote, on Thursday 10 March, on proposals to open up a duty-free tariff-rate quota of 300,000 tonnes, until September. It would mean sugar could be sourced from outside Europe without the usual import duty being applied. If the committee votes in favour of this, he said, businesses should be able to bid for a licence to import this sugar on 1 April, "which would help to meet some of the shortfall in the sugar market at the moment".

Those bidding for a licence will have to pay a bond of E150 per tonne, which is non-transferable between companies, explained Hough, who added that with 27 countries in Europe bidding for 300,000 tonnes of sugar, the amount bid for may have to be scaled down. "If people are able to bid for a licence on 1 April, they should find out by 23 April if they’ve been successful and, if the initiative is over-subscribed, how much their bid has been scaled down to."

A recent market report by sugar broker Czarnikow, suggested that 2011 looked set to be "another dynamic year" in sugar. "Despite an increase in Indian production, the market continues to look fragile and with early disappointments in north-east Brazil and in the beet crops of the northern hemisphere, the second half of the year will be key, with the risk of political and weather shocks remaining high," said head of analysis Toby Cohen.

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