BRUSSELS, Mar 2, CMC – The European Sugar Refineries Association (ESRA) says while it is not seeking to abandon sugar imports from the African, Caribbean and Pacific (ACP) countries, the current market situation “simply does not allow us to import from these partners”.
ESRA outlined its position in a study presented on January 30 to the European parliament, a copy of which has been obtained by the Caribbean Media Corporation (CMC).
In the study, conducted earlier this year, ESRA said that should the prices for the raw materials from the ACP and Less Developed Countries (LDC) become “competitive” for its members “there is no reason why we would not use these sources of raw materials”.
“However, the current market situation simply does not allow us to import from these partners. We are not asking for unlimited access to the global sugar supply. We understand that our supplies will always face some limitations due to political sensitivities in the EU sugar sector.
“All ESRA is asking for is the chance to compete in the EU sugar sector, through the provision of meaningful access to raw sugar,” it said.
On Friday, the ACP and the LDC called for a level playing field for all sugar stakeholders after the study presented to the European parliament, implicated them in the substantial decline in the price and export of the commodity over the past two years.
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”.
In the study, ESRA argues that the changed EU market in which it now operates, “means that our access to the global supply of raw sugar is even more severely restricted than in the past”.
“We believe this can be resolved,” it said, noting that it would “like to remind stakeholders what we are not … asking decision-makers to impose any kind of restrictions on domestic sugar production in the EU. Indeed, we hope for a fully liberalised sector in which we can join our beet-processing colleagues in a truly competitive market”.
“Although we have outlined the existence of supports for sugar beet production in Europe, we are not calling for their elimination. We understand the complexities of EU agricultural policy and the need for balanced regional and rural development.
“Rather, we think it important to point out that subsidies of EU sugar through coupled support, and the potential for supports such as private storage aid, are a reality: EU sugar producers should accept and acknowledge this in their communications with stakeholders.”
ESRA said that the only way it can compete in the EU sugar sector “in a manner that is fair to our sector is through the inclusion of duty-free access to raw sugar through EU free trade agreements with raw sugar exporters.
“If we fail to gain access to raw sugar, there will be no more discussion, as our sector will cease to exist.
To avoid this scenario, EU negotiators must remember that, when it comes to sugar, it is a mistake to approach these talks from a purely defensive point of view.
“We are EU stakeholders too, and we need EU negotiators to remember this. We need them to stand with us in these talks, and to fight for the access that can save our historic industry from an almost certain demise,” ESRA said in the study.
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.