European Sugar Users (CIUS) has called on the European Commission to implement temporary market measures should sugar end stocks fall below a certain threshold amid uncertainly in the EU sugar supply.
CIUS, an organization representing sugar-using companies including Mondelēz International and Nestlé, said that if end stocks fell below 2.4m tons, the Commission should act to guarantee adequate supplies.
On 27 March, the European Commission refused to release more imported sugar onto the market at reduced duties because it said the market was sufficiently stocked.
Muriel Korter, CIUS Secretary General, told ConfectioneryNews: “The stock is pretty high for the moment. There’s not a supply problem, but as soon as the end stock indicates a level lower than 2.4m tons they have to implement these market measures.”
The Commission has the power to implement temporary measures to boost the EU sugar supply such as releasing more sugar outside production quotas or allowing extra imports at reduced levies.
Uncertainties: Demand may rise
Korter said that that there were several uncertainties that could lower the end stocks and consequently cause supply constraints for confectioners.
CIUS said in a release that the import quota attributed to Brazil had still not been filled, which could represent a 300,000 ton shortfall.
“The other uncertainty is consumption – it could increase as well,” said Korter.
Demand for at least one sugar-using product appears to be on the rise. The European cocoa grind, an indicator of chocolate demand in the region, grew 3% last year – a significant improvement on 2012 when the grind dropped 10% on the prior year.
“It’s this uncertainty that needs to be monitored very closely,” said Korter.
Review later this month
CIUS said that if end stock levels fell below 2.4m tons, market measures should allow for a balance of additional sugar from imports and EU out-of-quota sugar at zero duty.
The Commission is expected to review stock levels at the end of April when it could decide to implement market measures.
Last year, the EU agreed to abolish sugar production quotas by October 2017. CIUS previously said the quotas limited production in Europe to around 80% of its needs.
European sugar prices have been falling since the EU announced the abolition. EU white sugar prices were down 14.8% in February compared to the same period in 2013 to €629 per ton. But prices were still 39% greater than the world price.