Tuesday

12th Dec 2017

EU 'confident' sugar sector prepared for end of quota

  • Sugar beet is often one of several arable crops that farmers produce, making them more resilient to sudden price drops. (Photo: Heather)

The European Commission thinks Europe's sugar industry is prepared, this weekend, for the end of the decades-old sugar quotas.

"I am confident that, since the end date for sugar quotas was decided, the industry has positioned itself well to benefit from the opportunities which the end of sugar quotas presents," EU agriculture commissioner Phil Hogan said in a press statement on Friday (29 September).

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • The sugar production quotas have been part of the EU's agricultural policy since 1968. (Photo: EUobserver)

On the same day, commission sources told journalists that the end of the sugar quotas "cannot be compared" to the end of milk quotas in 2015.

Two years ago, ahead of and after the end of the milk quota, dairy farmers increased production, which led to a drop in milk prices.

Farmers protested several times following the official cut-off date, some of them asking for new government interventions. In September 2015, the commission offered half a billion euros to support them.

"I cannot look into a crystal ball and know how different market participations react", said a commission source, adding, however, that several structural factors "give rise to the belief that it is a different situation" with the end of the sugar quota system.

In the sugar sector, it is the producers - and not the beet farmers - who decide the quantity of sugar produced.

"In the milk [sector], it's the farmers who have taken individual business decisions to invest," the source said.

Sugar beet is often one of several arable crops that farmers produce, and between which they rotate to keep the soil fertile.

"There is certainly the possibility for farmers to adjust. … You can have a certain variation in your crop rotation," said the source.

"Production decisions are taken on an annual basis, whereas investing in milk and herds have much longer cycles," she noted, adding that milk in Europe is often produced in regions where there is little to no alternative.

Exports

Additionally, the worldwide sugar market is very competitive.

"European sugar producers are very well aware of the fierce competition they have outside," the contact said.

Until Sunday (1 October), EU producers are not allowed to export more than 1.3 million tonnes of sugar. This export limit was tied to the sugar quotas, and will also be lifted.

But the commission does not expect Europe's sugar industry to be able to compete with, for example, Brazil on the American market.

Instead, the Middle East and North Africa were mentioned at the briefing, and in particular Israel, as new potential export markets.

"They will compete in zones where the transport costs give the European industry some advantage," a second source said.

Potential pressure

Last March, the European Association of Sugar Producers and the European Federation of Food, Agriculture and Tourism Trade Unions - representing respectively the employer and employee side of the sector - adopted a joint statement on the end of the sugar quota system.

"The end of quotas presents substantial opportunities for EU beet sugar manufacturers, in particular the possibility to produce more sugar for food use and to export without limits," they said.

However, they warned that the end of the quotas could also put the sector "under pressure".

"Less competitive EU beet sugar manufacturers may struggle to survive in a harsher market environment," the statement noted.

Volatility

However, the commission source said on Friday that the sugar industry should "be prepared" for changing prices, and is doing so.

"The sugar market at world level is very volatile, one of the most volatile markets. Some of this volatility will come more into our market," she said.

The sugar production quotas have been part of the EU's agricultural policy since 1968.

Focus

EU food system 'flawed', heart experts say

Cardiovascular disease remains leading cause of death in Europe. Fundamental reform of a "flawed" food system is needed to deliver a healthier diet, says a new report.

Why are European farmers unhappy?

EU farm ministers will hold a special meeting to discuss the pressures facing farmers across the bloc. But many factors are beyond their control.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

EU blacklists 17 tax havens, avoids sanctions

Finance ministers pointed out 'non-cooperative' entities and set up a second 'grey' list of more than 40 countries that have promised to improve their tax practices.

News in Brief

  1. EU to Israel: Don't expect us to move embassies
  2. EU Commission condemns anti-semitic 'Jerusalem' protests
  3. Ministers have 'lots of questions' on new CAP plans
  4. Commission: Brexit agreement is 'deal between gentlemen'
  5. 25 EU states sign defence cooperation pact
  6. Netanyahu wants 'hardy' talks with EU on Jerusalem
  7. French centre-right elects new leader
  8. Germany and UK increase arms sales

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. Alignment with EU is 'last resort', May tells MPs
  2. Iceland: further from EU membership than ever
  3. Israel presses Jerusalem claim in EU capital
  4. From dark coal toward a brighter future
  5. UK casts doubt on EU deal in 'bizarre' twist
  6. Romania wants EU signal on Schengen membership
  7. Germany says China using LinkedIn to recruit informants
  8. No chance of expanding EU warrant crime list

Stakeholders' Highlights

  1. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  2. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  3. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  4. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  5. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  6. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  7. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  8. Dialogue PlatformThe Turkey I No Longer Know
  9. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives
  10. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  11. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations
  12. Nordic Council of MinistersNordic Energy Ministers Pledge to Work More Closely at Nordic and EU Level