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EU sugar policies could fuel yeast price rises

June 4th, 2011

European yeast producers have attacked EU Commission sugar policies, warning that they could inflate costs and put the industry at risk.

Industrial sugar is used to grow and ferment yeast, representing 25 to 33 per cent of production costs for yeast suppliers. Changes in the availability and price of sugar can therefore have a big impact on their competitiveness in what is a price sensitive market.

With a major shortage of sugar in Europe and world prices at record highs, the Commission has taken emergency action that the Confederation of EU Yeast Producers (COFALEC) claims puts the industry in danger.

EU yeast suppliers use industrial or out-of-quota sugar. COFALEC said the Commission first put its members in a difficult situation by releasing 500 000 tonnes of sugar to the in-quota market that had previously been reserved as out-of-quota sugar for the bio-industries.

“This was quite difficult for our members but we didn’t grumble too much because it was an unusual situation – we accepted it as an act of solidarity in Europe,” Gérard Blin, president of COFALEC, told FoodNavigator.com.

Impact of sugar export quota

But then at the end of April the Commission decided to allow an additional 700, 000 tonnes of sugar to be exported onto the world market, where Blin said prices have risen above those in the EU for the first time in around 30 years. This took the total amount of sugar approved for export for the year up to almost 1.4m tonnes.

Blin said this decision was “neither understandable nor acceptable” given that the bio-industries had been asked to make a sacrifice.

“I’m absolutely furious that we are asked to contribute and sugar producers are allowed to sell as on the world market and aggravate the shortage in Europe,” he said.

The COFALEC president explained that the release of so much sugar for export would affect its access to competitively priced sugar.

“We’ll have to pay prices that we have never paid in the history of the industry,” said Blin.

That will influence the prices that yeast producers charge to bakers, wine markers, brewers and other food industry customers.

Source: Bakery and Snacks

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