On Monday 26 January, the European Commissioner for Agriculture, Christophe Hansen, announced an exceptional measure designed to relieve European sugar producers, who are facing a particularly difficult market situation. A temporary suspension of the ‘inward processing arrangements’ is planned in order to reduce pressure on the market and stabilise prices.
Europe’s sugar producers are in a “particularly difficult” situation, admitted Mr Hansen during a debate with European agriculture ministers on the results of the meeting of 7 January on the future of the Common Agricultural Policy (CAP).
As a first measure, Mr Hansen undertook to “temporarily” suspend the inward processing regime, a measure that “will alleviate some of the pressure while also looking for solutions”, the Commissioner told the ministers.
The situation remains very delicate for a number of key products and sectors, including sugar. This is why he will be asking his departments to carry out “a thorough assessment” of agricultural markets and the challenges they face.
Dialogue with sector representatives will be stepped up in order to put forward concrete proposals for meeting these challenges.
The ‘inward processing procedure’ is an EU customs mechanism that allows a company to temporarily import raw materials or semi-finished products without immediately paying customs duties or import taxes, and to transform them in an industrial process on EU territory. This then allows the company to re-export the finished product to a third country or to place it on the European market with reduced duties or calculated solely on the value added.
In the case of sugar, a producer can import raw sugar or sugar raw materials under this scheme for processing into refined sugar or other products. Normally, it does not pay import duties at the time of entry. If the Commission temporarily suspends this scheme, it means that companies can no longer benefit from this suspension of rights for a given period. This suspension may ease the pressure on the European sugar market, as it temporarily limits processable imports, which would increase supply and thus depress prices on an already fragile market.
Christophe Hansen pointed out that the meeting of European ministers on 7 January had focused on issues relating to the EU’s 2028-2034 Multiannual Financial Framework (MFF), reciprocity of standards, fertilisers and simplification (see EUROPE 13781/4). “The Commission sent a very clear political signal with the announcement of an additional 45 billion euros, coming from an anticipation of the reserve foreseen”, he stressed. The CAP budget for 2028-2034 is now close to €400 billion, “this is of course significant and justifiable given the strategic importance of food security”, he concluded. (Original version in French by Lionel Changeur)