Germany produced 3.64 million tonnes of white sugar during the 2010/11 season according to the German sugar industry association WVZ, down from the 4.2 million tonnes produced during the 2009/10 season. Bad weather reducing sucrose content was to blame. Initially a heat wave in the summer, followed by late rains and then a very cold winter impacted the crop. The 2010/11 season is now complete.
German sugar supplies stand at 3.86 million tonnes which is almost 1 million tonnes above Germany’s EU quota of 2.89. The EU sets quotas for sugar production which is subsidized across the EU. Above quota sales are restricted to industrial use such as ethanol production.
Imports into the EU are lower due to higher world sugar prices making other destinations more attractive. German demand for sugar is likely to increase following the government’s decision to increase the percentage of ethanol blended into gasoline in Germany. This is likely to also increase the size of the German beet crop during the 2011 season which commences in the winter.
The EU has opted for zero duty on an import quota of 300,000 tonnes instead of the previously suggested reduced duty applied to its tendering process.
The European Commission announced following a meeting of the sugar management committee that fixed volume imports at zero duty would help smaller companies obtain sugar supplies.
The EU’s current duty is Euro 339 per tonne on raw sugar and Euro 419 per tonne on white sugar. The new import quota will be managed on a monthly basis. Additional import quotas are likely to be proposed during 2011.
The Commission initially agreed to a tendering process which would give it more control over the volumes imported and prices paid. Britain, Sweden and Portugal protested that a tender process with minimum duties and volumes forming part of the bid process would only benefit larger importers at the expense of smaller rivals. The new plans are to initially be adopted by the European Commission before a vote on the matter in early March.
The European Commission allowed 300,000 metric tonnes of raw or refined sugar without import duties. It was also decided that 500,000 tonnes of out of quota sugar would be permitted.
The EU’s sugar management committee voted today to allow additional imports and the sale of out of quota sugar. The sugar management committee’s decisions concerning the EU sugar market, import tariffs and subsidies are ratified by the European Commission.
EU sugar producers can sell limited quantities of sugar. The EU is to scrap a levy on out of quota sugar. Licences for out of quota sugar would be confirmed following weekly applications. A Euro 500 per tonne penalty would be applied if the volumes were not filled.
Dacian Ciolos, EU farm Commissioner announced the news following a meeting with EU farm ministers today. The news will be welcomed by refiners and sugar users as supply has been tight and companies, including confectioners, have faced difficulty obtaining supplies.
The EU faces tight sugar supply with European buyers, including confectioners, finding difficulty buying quota sugar. EU regulation for the sugar industry was revised in 2006 following a WTO decision that EU production quotas for each country should be reduced to the extent that the block becomes an importer of a minor part of its consumption with developing countries being granted preferential access as exporters to the EU, facing no import tariffs, and from 2015 without restrictions on the quantities exported.
EU quotas for its sugar production first decreased in 2006 in the expectation that developing countries would export the deficit. Such exports have not always materialised and more recently high world sugar prices have resulted in such sugar being exported elsewhere. The EU, facing shortages, has decided to allow out of quota sugar and additional imports.
The EU is to permit sugar imports over and above the national quotas set for EU states. Raw and white sugar is to be authorised for import under reduced duty. A tender is likely to be announced shortly specifying the quantity of sugar to be imported. Although it is expected that the EU may authorise the import of approximately 500,000 tonnes of out of quota sugar.
The usual 500 Euro per tonne duty on this out of quota sugar will not apply. The decision is not yet EU policy but is expected to be announced shortly.
Posted in Sugar
Tagged EU out of quota sugar, EU sugar, EU sugar duty, EU sugar quotas, raw sugar, sugar export, sugar exports, sugar guru, sugar imports, sugar supply, white sugar