EU food industry representatives have termed ‘premature’ the proposal by the European Commission (EC) to allow 650,000 tonnes of out of quota sugar exports from October.
A raft of measures aimed at offsetting any potential shortfall in sugar in the 2011/2012 market was backed by member states at yesterday’s management committee for the common organisation of agricultural markets in Brussels, but they still have to be formally adopted by the Commission.
The package fixes a quantitative limit for the exports of out-of-quota sugar and isoglucose (50,000 tonnes) up to October 2012. It also includes the opening of an import quota of 400,000 tonnes for industrial sugar.
The Commission said the measures should “provide sugar operators in the EU with predictability for the next marketing year starting from October 2011.”
Muriel Korter, general secretary of trade group CIUS, told BakeryandSnacks.com that the proposals are rash.
She said measures for the next marketing year should not be introduced until the EU sugar market supply returns to “a sound and fair position.”
A joint statement from the CIUS and yeast producers group, COFALEC, earlier this month said: “There is no evidence today that internal market supply and demand balances will return to equilibrium within the coming months, or during the next marketing year, despite the Commission’s recent corrective measures.”
Rapidly rising world sugar prices and bad weather, speculative hedging on supplies and stockpiling across the world have combined to leave end user manufacturers in bakery, confectionery and the wider food industry worrying about sugar supply problems.
In Europe, sugar shortages in recent months have been enhanced by the movement of world prices, which have risen above the bloc's set prices of €404.00 a tonne for white sugar and €335.20 a tonne for raw sugar.
Confronted with this tightness of supply, the EC has already tabled a series of exceptional measures aimed at boosting sugar supplies in the short term including opening up an import quota and releasing out-of-quota sugar into the bloc.
But Ben Eastick, director of UK based syrups and unrefined sugar producer Ragus, told this publication in February that: “if the Commission allowed imports from the world market duty free then this would probably have the effect of increasing the world market values, thus making it more difficult to attract imports [to the EU].”
Sugar traders would continue to look beyond the EU and to sell to those markets where they can get a better price for their ingredient, he argues.