Brussels to lift sugar exports amid shortfall

The European Commission plans to allow European farmers to export an additional 500,000 tonnes of sugar before the end of July to ease a worldwide supply shortage that has driven prices to their highest levels for almost 30 years, reports The Budapest Business Journal.

“The current situation on the world market is exceptional,” said Mariann Fischer Boel, European Commissioner for Agriculture and Rural Development: “Sugar prices have risen to unprecedented levels, to the detriment of consumers in poorer countries.”

The European Commission will on Thursday submit to the Management Committee a draft Regulation allowing the export of an additional 500,000 tonnes of out-of-quota sugar in the 2009/2010 marketing year (to July 31st 2010).

This temporary measure, which fully respects the EU’s international obligations, has been made possible by the exceptional market conditions at both the EU and world level. The present market situation for sugar is very unlikely to occur again in the future

Mariann Fischer Boel, European Commissioner for Agriculture and Rural Development, said: “The current situation on the world market is exceptional. With production below consumption and diminishing sugar stocks, sugar prices have risen to unprecedented levels, to the detriment of consumers in poorer countries. This situation has coincided with the end of the restructuring of the EU sugar industry. The EU market price has been reduced and the least competitive producers have stopped sugar production, improving the competitiveness of the EU sugar sector, both at beet producer and factory level. The price situation on the EU and world market as well as production costs for beet and sugar in the EU are such that out-of-quota sugar produced in the EU can be exported without violating the EU’s WTO subsidy commitments.”

World market sugar prices are currently at record levels, well above the market price for EU quota sugar. Unfavourable weather conditions in India and Brazil have worsened the global sugar deficit and further diminished sugar stocks, triggering an upward pressure on world market prices.

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