By Isis Almeida and Rudy Ruitenberg
European Union proposals to change rules on
sugar output and usage will pit France, the biggest food producer in the bloc,
against the U.K. next week when members of the European Parliament meet in
Brussels.
Sugar quotas that limit production should
expire Sept. 30, 2015, EU Agriculture Commissioner Dacian Ciolos proposed in
October. The European Parliament will consider on June 18 and June 19 whether
to end that policy that caused sugar supply shortages in the bloc for the past
two years.
Sugar beet growers backed by France oppose
the plan, saying they need at least until 2020 to become more competitive,
while the U.K. says the proposal will allow farmers to grow their business.
While international prices have fallen 20 percent in London over the past year,
white sugar in the EU averaged 711 euros ($898) a metric ton in March, the
highest since at least July 2006, commission data as of May 3 show. An EU sugar
users’ group backed by Kraft Foods Inc. opposes France’s plan.
“European farmers are going to have huge
opportunities to feed an increasingly hungry world,” the U.K. Department of
Environment, Food and Rural Affairs wrote in an e-mailed comment yesterday.
“Scrapping counter-productive sugar beet quotas will up production, stop
shortages and bring down prices.”
The European Parliament gets the final say on
farm policy for the first time, Jan Jakubov, agriculture spokesman, said by
phone from Brussels yesterday. Policy makers for France and the U.K. will
attend the meeting next week when Parliament’s rapporteurs will present their
view on the reforms for the first time, he said.
France’s View
“I’ll defend, in France’s name, the position
that consists of maintaining the current regulation until 2020 to allow this
industry to adjust, and at the same time give it the outlook on the future that
it seeks,” French Agriculture Minister Stephane Le Foll told sugar beet growers
at an industry meeting in Reims on June 12. “I also know of the need to have a
little bit more time that’s required so you can adjust.”
The end of sugar quotas would mean that
French production would have to compete with Thailand, the world’s
second-biggest exporter, and India, the second largest producer. Brazil is the
top exporter and producer and its production costs have been climbing because
of labor costs and strengthening value of the real currency since 2000.
Sugar Users
The Committee of European Sugar Users,
representing companies including Kraft Food Inc. (KTF) (KTF) and
Nestle SA, is opposed to France’s plan, the Brussels-based group said in a
statement e- mailed today.
“EU sugar users have seen an increase of 40
percent in sugar prices within the last year, leading to significant financial
instability for many food manufacturers across Europe,” said Robert Guichard,
president of the committee and procurement manager of sweeteners for Kraft
Foods in Paris.
“Postponing again the debate to 2018 is not
going to help prepare EU farmers or the food sectors to adapt to future market
challenges,” he said. The committee “demands that the commission proposal of
abolishing quotas in 2015 is respected.”
The EU spent four years since 2006 shrinking
its sugar-beet industry to comply with a ruling by the World Trade Organization
limiting its exports.
Net Importer
After the reform, the bloc became a net
importer and dependent on supplies from a group of least developed countries
and some nations of the African, Caribbean and Pacific group of countries that
have preferential access to the EU market.
“The problem facing the EU has been the limited
availability of preferential imports from least developed countries and ACP,”
LMC International Ltd. and London-based Overseas Development Institute said in
a report at the U.K. Parliament’s inquiry into the EU sugar regime on June 13.
LMC International is an Oxford, England-based
agriculture research company and Overseas Development Institute focuses on ways
to reduce poverty in developing countries. Shortages of sugar in Europe are set
to continue through 2015, they said in the report to the U.K. Parliament.
The removal of sugar quotas is likely to
reduce the EU sugar price by 100 euros a ton, LMC International and the
Overseas Development Institute said. White, or refined, sugar on NYSE Liffe
settled yesterday at $566.70 a ton.
The elimination of sugar production quotas
“must only be done alongside opening up markets for tropical cane sugar, which
is crucial for British refiners, food manufacturers, and consumers,” Defra
said.
The EU has not proposed changing import
duties. The levy is 339 euros a ton on imports of raw sugar and 419 euros a ton
for white sugar.
To contact the reporter on this story: Isis
Almeida in London at Ialmeida3@bloomberg.net; Rudy Ruitenberg in Paris at
rruitenberg@bloomberg.net
To contact the editor responsible for this
story: Claudia Carpenter at Ccarpenter2@bloomberg.net.
Original Article Here
No comments:
Post a Comment