SUGAR MARKETS

sugar demand
and supply
in the EU

Eu sugar sector sugar factory

one of the world's top sugar producers - scale and competitiveness

Eu sugar sector sugar production

the EU sugar sector

The European Union (EU) is one of the world’s top sugar producers – both in terms of scale and competitiveness. The majority of EU production is from sugar beet grown in 19 Member States, with leading country producers including France, Germany, Poland, the UK and the Netherlands 1.




imports and exports



Since 2006 the EU has been a net importer of sugar - of its total demand of about 17 million tonnes annually from the food industries and retail sector, up to 3.5 million tonnes annually is met from imports, most of which are duty free.



met mainly from
duty free imports

In contrast, EU sugar exports, which have been restricted since 2006, currently average only about 1.3 million tonnes annually2.



due to reforms and restricted globally traded exports




2006 reforms

changing the face of the EU sugar sector






The sector has been progressively deregulated by two substantive reforms in 2006 and 2013. The first of these resulted in the EU beet sugar industry closing almost half its manufacturing sites, and cutting production capacity by 4.5 million tonnes (30%)3. As a result of the 2006 policy reform and subsequent industry response, the EU changed from being the world's second largest sugar exporter to one of its biggest importers4.




sugar imports significantly liberalised

 

Sugar imports into the EU have also been significantly liberalised, in line with the EU’s development and trade objectives. For example, unrestricted duty-free imports were introduced from 2009 for Least Developed Countries (LDC) and African, Caribbean and Pacific (ACP) countries, duty free imports were offered to Balkan countries, and an increasing number of free trade agreements are being agreed and introduced, mostly at zero duty7. Low duty (€98 per tonne) ‘CXL’ imports were also agreed for several countries including Brazil, Cuba, India and Australia. As a result of these changes, EU sugar imports have increased by 60% from about 2.2 million tonnes annually pre-2006 to 3.5 million tonnes annually by 2015/168. Of this, 2.7 million tonnes annually is now available duty free.



imports

increased

60%





a substantially deregulated sector

 

The last stages in this reform process will be completed in 2017. From 2018 the EU sugar sector will become substantially deregulated, with sugar covered by the general provisions of the Common Agricultural Policy (CAP), including the decoupled basic payment scheme and crisis measures5. However, a few sugar-specific measures will remain in place beyond these general provisions, for example some voluntary coupled support has been agreed until 2019 for less efficient producers in 10 Member States6 for food and livelihood security and rural development.

This does not apply, however, for the more efficient Member State industries, including the UK’s.


References

  1. EU Commission data (FCA)
  2. European Commission balance sheets 2006/07 – 2016/17
  3. Between 2005 and 2015 the EU beet sugar sector closed 83 factories, cut over 24,000 direct jobs and lost 165,000 grower suppliers. CEFS and CIBE statistics, 2016
  4. EU Commission data (FCA)
  1. Council-Parliament Regulation 1308/2006, Articles 17-20 and Articles 219-221
  2. European Commission, voluntary coupled support for sugar beet, notifications by Member States, 15 April 2015
  3. European Commission Sugar Management Committee trade reports, 2010/11 - 2015/16
  4. European Commission sugar balance sheets, 2005/06 - 2015/16
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