Brussels, 09/05/2016 (Agence Europe) - The European agricultural organisations urged the European Commission in Wednesday 4 May not to table plans, as it hopes to do at the end of this month, to increase supply of sugar to the EU market.
The Commission is planning to authorise the import of sugar and reclassification of out-of-quota sugar, increasing the supply on the EU market by as much as 300,000-400,000 tonnes. At a meeting of member state experts on 28 April, the plan failed to secure the majority support needed. The Commission plans to submit the text once again to the experts on 26 May. It fears a shortage of sugar in late summer/early autumn. Internal Commission sources say that the decision will be taken in due course, in light of the way the situation develops.
In February of this year, CIUS, which represents the European sugar-using food and beverage industries, called on the Commission to ensure that adequate measures are taken in order to avoid supply shortages this summer. It pointed out that the increase from 650,000 to 1,350 million tonnes (the limit set by the WTO) in the maximum quantity of out-of-quota white sugar that can be exported without refund in marketing year 2015-2016 “came too early, given the uncertainty on the levels of imports”. And at the start of March, European sugar manufacturers (CEFS) and beet growers (CIBE) expressed their concern at the calls from some quarters for such provisions which could affect prices less than 18 months from abolition of the quotas system.
Exceptional sugar market management measures do not seem to be justified in view of the market forecast, and particularly as there is uncertainty over consumption levels, as in the previous marketing year, state Copa-Cogeca in a letter to Peter Power, who heads the private office of Agriculture Commissioner Phil Hogan, on 3 May. They go on to note that “the average price of white sugar in the EU has also been stagnating for over a year now and fell by €2 between January and February”. In addition, the organisations note, “access to the European sugar market for non-EU suppliers has doubled in a decade thanks to the numerous concessions granted in bilateral trade agreements. What's more, forecasts for the 2016/2017 marketing year predict that the area under sugar beet in the EU will rise by at least 7% and that processing will begin well before 1st October”. Consequently, there is no risk that the EU will suffer from a lack of sugar, they argue. European beet growers reduced the area under beet by more than 10% during the 2015-2016 marketing year in order to rebalance market forces in the sugar sector, Copa-Cogeca point out, too. They add that introducing exceptional market management measures could have an impact in the month of August, which could weaken the negotiating power of the EU sugar beet sector in the food chain. (Original version in French by Lionel Changeur)