13 Nov, 2008 - The EU's white sugar production quotas have been reduced by some 5.7 million MT since the reform came into effect in 2006, which is approaching the 6 million MT cut target.
EU inquota sugar production will decline to 14.2 million MT (raw value) in MY 2008/09, or 16.6 million MT including out-of-quota sugar. Imports are expected to increase to 4.0 million MT taking into account Romania and Bulgaria, with exports up to 1.7 million MT (reflecting the recently opened TRQ for exporting out-of-quota refined sugar without refund of 0.6 million MT within the framework of the WTO agreed level of 1.3 million MT, and the traditional 0.9 million MT of sugar in processed products). Human consumption should remain at current levels, with industrial and bioethanol use stable at significantly higher levels than those obtaining in MY 2006/07.
Reform of the EU Sugar Regime
The European Commission is of the view that some 6 million MT of white sugar production quotas will have to be renounced by the end of MY 2009/10 in order to balance supply and demand. In MY 2007/08, the second year of the four year implementation period associated with the Sugar Reform, only 709,000 MT were given up, representing less than 50 percent of the 1.47 million MT that were sold back in the previous MY. The impact was exacerbated by good climatic conditions that increased agronomic yields in several Member States that year.
As such, production did not decrease in the second year of the reform. Within this framework, the European Commission introduced technical changes to the legislation governing the reform, the effects of which were 3.33 million MT of quota (or 20.5 percent of the total quota allocation for that year) being rescinded for MY 2008/09. The closing down of Spain’s Ebro Puleva sugar factory in Penafiel resulted in a further 130,000 MT already having been renounced for MY 2009/10. As such, the EU’s white sugar production quotas have been reduced by some 5.7 million MT since the reform came into effect in 2006, which is approaching the 6 million MT cut target.