Brussels / Algiers, 11/01/2007 (Agence Europe) - Algeria is suffering from a sugar shortage and soaring prices. According to the local press, which echoes statements by Algerian importers, this is due to the management of import quotas agreed with the European Union in the context of the association agreement. The agreement fixes at 150,000 tonnes annually the quota for European refined white sugar that can be exported to Algeria at world prices, lower than EU guaranteed prices. In addition to the quotas, importers must pay a local tax of 30%. In order to benefit from tariff-free quotas, Algerian importers must buy licences according to the principle of “first come, first served”. In practice, these licences are then sold to the country's biggest buyers. Some sources say there is also a risk of shortage on the national market for corn and other farm products covered by the agreement for similar reasons.
The press cites customs services, whose statistics are considered the most reliable. According to data available, 87% of imported sugar was exhausted in the first week of January - 130,000 tonnes out of the 150,000 tonnes that could enter the market duty-free. European sources unofficially affirm that the problem results from a speculative movement already recorded in 2006, the first full year of the quota regime established by the agreement that took effect at the end of 2005.
The preferential regime set in place with the EU does not damage the traditional dominant position of some speculators. Their reaction was to acquire a large part of the licences and to create a situation of artificial shortage.
The principle customs official has confirmed this. Sid Ali Lebib states that entry into force of the association agreement between Algeria and the European Union is operating extremely well. Three weeks after its entry into effect, no major hitches have been notified to the customs management, he told the Algerian press.
The surge in sugar prices currently at the heart of the polemic is in no way linked to the association agreement with the EU, stressed the customs chief. He thus confirmed earlier declarations made by the Head of Government and Trade Minister who reacted to internal price rises, in the belief that the situation results from the general economic situation and not from application of the association agreement.
On the other hand, the main Algerian sugar group, Cevital, which buys and processes raw Brazilian sugar, complains of the regime which, it says, does not allow it to have free access to the European Community market. “We import raw sugar, that we then refine. We cover the needs of the national market and we export to countries of the region such as Libya, Tunisia and certain African countries, but we cannot export to EU countries as we are blocked by specific taxes imposed on Algeria under the agreement with the EU”, said Issad Rebrab, Cevital Director. He calls on the authorities of his country to make it a requirement that Brussels lift such “blocking” measures. The European Commission, however, states it can make no concessions for a product that is not entirely of Algerian origin. (fb)