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EU sugar reform planned

August 26th, 2011

The European Commission (EC) is set to introduce plans to reform the European Union (EU) sugar regime in mid-October, according to industry sources. The plans are thought to contain proposals to abolish beet sugar production quotas. British sugar prices rocketed by 60% to reach €880/tonne this year, compared with €500 – 550/tonne a year ago. Industry participants are calling for the EU to either increase quotas or to allow food manufacturers to import sugar tariff-free from the world market.

Industry giant Nestlé also believes reform is overdue. “Significant changes are required to bring sufficient transparency and fair conditions to the market. As such, the EU reform should phase out sugar production quotas as of 2015,” a spokesman recently told the Financial Times.

The EU commission has agreed to allow one million extra tonnes of sugar to enter the market, after lobbying from UK’s Defra. Earlier this year, the EC suspended import duty on some categories of sugar imports. Two duty-free import quotas were opened for a total of 500,000t and 500,000t of surplus EU sugar production was released onto the market.

The price increases have been blamed on lower-than-expected harvests in the key producing regions of Brazil and Australia, global demand rising at 2% each year and more of the European harvest being diverted to ethanol production.

Fuente: Dairy Industries

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