USDA annual report on the EU sugar sector
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CTA. 2003. USDA annual report on the EU sugar sector. Agritrade, June 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52545
According to this USDA report, in 2002/03 EU sugar production rose 15% to...
According to this USDA report, in 2002/03 EU sugar production rose 15% to 18.66 million tonnes. Indications are that the area under sugar has been reduced by 6.5% in response to a cut in sugar quotas in 2002/2003 and higher carry-over of stocks. Production in 2003/04 is projected to be 17.4 million tonnes (raw sugar equivalent) under normal growing conditions. In October 2002 in response to WTO limits on EU sugar export subsidies and weak prices during most of 2002 the European Commission reduced sugar quotas by 7% for the 2002/03 season. This cut of roughly 900,000 tonnes came well after the 2002/03 crop had been sown, and so had no impact on overall production, but rather increased the level of 'C' sugar production. With this largely carried over to the following year, reduced planting for 2003/04 resulted. In 2001/02 EU imports of sugar increased to 2.087 million tonnes raw sugar equivalent, with Serbia and Montenegro entering as the fifth largest source of imports. The opening up of the EU market to duty-free access from the western Balkans accounts for the increase in imports as the high-priced EU market sucks in imports. This however is mainly in the form of refined sugar. In outlining the EU's import arrangements the USDA analysis quotes an ISO (International Sugar Organisation) study which, under conservative assumptions, projects imports of 1 million tons of raw sugar equivalent by 2009 from least developed countries, with this rising to 2.9 million tonnes if expensive infrastructure investments occurred in these countries. The analysis reviews the basis for the extension of the EU sugar regime to new member states and the likely implications of such a move, most notably an expected increase in the EU's structural surplus of sugar. It notes that enlargement is increasing the pressure for an early reform of the sugar regime, since it will be much harder to reach a consensus on reform amongst 25 governments than amongst 15. However it is noted that budget limits will seriously constrain the reform options open to the EU, given the extent to which the current costs of the sugar regime are borne by EU consumers. Comment: EU 'C' sugar exports (sugar exported without a direct export subsidy) in 2002/03 at 3.256 million tonnes once again exceeded EU sugar exports receiving a direct export subsidy which were 2.348 million tonnes. In terms of imports from least developed countries it is not clear to what extent ISO projections take into account likely scenarios for reform of the EU sugar regime, for as the report notes least developed countries 'are not the lowest cost producers on the world market' and they may therefore 'find it difficult to compete if EU prices are lowered as a result of sugar reform'.