BRUSSELS, Mar 1, CMC – The African, Caribbean and Pacific (ACP) and Least Developed Countries (LDC) are calling for a level playing field for all sugar stakeholders after a study had been presented to the European Parliament implicating them in the substantial decline in the price and export of the commodity over the past two years.
The study was undertaken by the European Sugar Refiners Association (ESRA) on raw materials in the EU sugarcane sector earlier this year and presented to the European Parliament on January 30.
But the ACP Sugar Group, representing ACP and LDC sugar industries in 18 developing countries, said that the current problems in the EU sugar market were caused by the over-production of subsidy-fuelled EU sugar, which has led to record low prices in European markets and to consequent reductions in demand for sugar imported from developing countries.
Latest figures published by the European Commission, showed the weighted average EU domestic price had fallen to a new low of Euro 31.4 (One Euro=US$1.29 cents) per kilo, and imports from ACP and LDC countries are currently less than a third of the levels recorded before quotas were abolished.
The ACP Sugar Group contend that the EU over-production has also led to EU exports doubling in volume and taking market share in ACP regional markets, displacing ACP and LDC sugar both in the EU and in ACP sugar’s neighbouring developing country markets.
It said that this is contrary to the recommendations made in the Cardno report on “Current and Forecast Market Developments for ACP Sugar Suppliers to the EU Market”.
The ACP Sugar Group said the study suggests a higher cost for imported ACP/LDC sugar mistakenly using data that includes not just the price paid for raw sugar for refining but also the price paid for premium speciality sugars.
ACP and LDC sugar producers agree with ESRA’s assessment that the root cause of the decline is overproduction. However, they dispute ESRA’s proposed solutions and they ask the EU not to further erode preferences for ACP and LDC countries by increasing the supply of sugar in an already oversupplied market through additional import quotas, lower MFN (most favoured nation) tariffs and/or new free trade agreements (FTAs).
The ACP Sugar Group said it also supports ESRA that the EU market has been badly managed by policy-makers.
It said that the market has been adversely affected by domestic overproduction, in part because sugar beet in 12 member states is directly subsidized on a per hectare basis.
“The end of Voluntary Coupled Support in the EU sugar sector would give both ESRA members and ACP, LDC and other developing country sugar suppliers some respite in the EU market and enable fairer competition both in the EU and globally.”
It said that in response to customer requirements in the EU and elsewhere, ACP and LDC sugar producers utilize several different certification schemes including Bonsucro certification.
“The adoption of Bonsucro certification is a private commercial decision…which should not determine which countries have duty-free market access to the EU markets and/or which may wish to adopt other sustainability and good practice initiatives.”