Bloomberg News

EU Is Considering Allowing More Sugar Sales, Faster Imports

April 02, 2012

The European Union may allow sugar producers to sell more supplies domestically and accelerate import tenders after consumers complained about shortages, according to the European Commission, the bloc’s regulatory arm.

Producers may be able to sell an extra 250,000 metric tons within the bloc at a reduced duty, according to draft proposals presented last week at the EU’s sugar management committee, Karolina Kottova, a spokeswoman for the commission said in an e- mail today. Tenders to import sugar also may be held earlier than anticipated, she said, citing the proposals.

“In order to make the market more fluid and to prepare for a possible tighter market situation later in the marketing year, the commission’s services introduced some draft proposals to member states for discussion in last week’s management committee,” Kottova said in the e-mail.

The EU may need another 1.6 million tons of sugar after shortages disrupted food manufacturing in the bloc, the Committee of European Sugar Users, which represents companies including Kraft Foods Inc. and Nestle SA, said in a statement sent to the commission last month.

Sugar Shortage

The bloc is facing a shortage even as global supplies of the sweetener outpace demand by 7.7 million tons this season, according to Czarnikow Group Ltd., which traded sugar in over 90 countries last year.

Tenders to import raw sugar at reduced duties would be held on May 2, May 23 and June 6, according to a copy of the proposals obtained by Bloomberg. They had been previously scheduled to take place on June 6, June 27 and July 11. The EU’s sugar management committee, which manages the process of sales and tenders, is scheduled to meet April 12.

While international sugar prices have fallen 15 percent in New York over the past year, the sweeteners’ price averaged 683 euros ($909) a ton in Europe in January, the highest since at least July 2006, according to data on the commission’s website.

The EU, once the second-biggest sugar exporter, has sought to reduce sugar production since the World Trade Organization said in 2005 it was disrupting global markets by exporting subsidized output. The EU spent about 5.2 billion euros since 2006 to shrink the industry. Rules limit the amount of sugar local producers can supply to the domestic market, and any surplus must be exported or put to non-food use. Imports usually incur a duty of 339 euros a ton.

The curbs are “creating an artificial shortage and pushing up prices,” the Association of the German Confectionery Industry said in a statement in February.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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