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Commission introduces measures to ease EU sugar deficit

February 25th, 2011

A European Commission initiative to release 500,000 tonnes of out of quota sugar onto the EU market has been backed by member states in the EU sugar management committee today.

In addition, the delegates backed a move to open an import quota for 300,000 tonnes of raw or refined sugar at zero duty in early March.

The Commission stressed that the measures are in response to the current exceptional market circumstances which see the EU sugar market in deficit and world market prices above average EU levels.

Rapidly rising world sugar prices and bad weather, speculative hedging on supplies and stockpiling across the world have combined to leave end user manufacturers in bakery, confectionery and the wider food industry worrying about sugar supply problems.

In Europe, sugar shortages in recent months have been enhanced by the movement of world prices, which have risen above the bloc’s set prices of €404.00 a tonne for white sugar and €335.20 a tonne for raw sugar.

Meanwhile, food and drink trade representatives have been lobbying the European regulator since June 2010, pressing for the introduction of such measures to alleviate supply pressures.

The Commission said that licences for the “out of quota” sugar will be released based on weekly applications, but with a 500 €/t penalty applicable if the volumes are not filled. The import quota, open to all third countries will be managed on a monthly basis, it continued.

According to the statement this morning, the sugar committee will continue to monitorthe EU supply situation and will propose additional import quotas later in the marketing year, if appropriate.

Speaking after the management committee vote, Dacian Ciolo, Commissioner for Agriculture and Rural Development, stated: “In a context of high world prices and tight supplies, these measures will help to ease the situation by making more sugar available on the EU market.

This move builds on my commitment of October 2010 to take exceptional measures should the market situation make them necessary.”

 

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