EU May Need to Seek Larger Sugar Supplies While Quotas Last

The European Union may have to seek a larger supply of sugar in every season until the scrapping of quotas on domestic sales, according to the European Commission.

Sugar shortages in the current period already prompted the commission, the EU’s executive arm, to let local producers sell more in the domestic market and to increase imports. Further measures may be needed until the quotas end, Joao Pacheco, the commission’s deputy director general for agriculture and rural development, said today in an interview in Brussels.

“In the past two years, we’ve had to do this,” Pacheco said, referring to additional measures to boost the 27-nation bloc’s sugar supplies. “Until the end of quotas, it is probable that this will be necessary.”

EU rules now oblige domestic producers to export sugar above the amount they’re permitted to sell within the bloc or put it to non-food use. The commission wants to end the quotas in 2015, while the European Parliament’s agricultural committee plans to extend the system until 2020.

The commission is sticking to its plan to add 1.2 million metric tons of sugar to EU supply this season, Pacheco said. The bloc has already allowed imports of 54,000 tons of raw sugar and 8,540 tons of the refined, or white, variety under the plan as well as authorizing local producers to sell an additional 150,000 tons in the domestic market.

Import Tender

“We have just started the operation for the 1.2 million tons,” Pacheco said in the interview. “We will have another import tender tomorrow.”

EU sugar prices climbed to an average 728 euros ($954) a ton in November, the highest since at least 2006, figures from the commission showed. Raw sugar fell 16 percent last year in New York trading on ICE Futures U.S. and refined sweetener dropped 13 percent on NYSE Liffe in London.

The quotas leave some EU sugar demand to be met by imports from countries that have preferential accords with the bloc, including some nations in the African, Caribbean and Pacific Group of States and some least developed countries.

To contact the reporter on this story: Isis Almeida in Brussels at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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