Nov. 8 (Bloomberg) -- The European Union proposed allowing 1.2 million metric tons more sugar into the bloc in the season that started last month to ease shortages, according to the European Commission, the bloc’s regulatory arm.
The additional supplies will come from extra imports and from local producers, which will be allowed to sell more in the domestic market, Roger Waite, a spokesman for the commission. said in an e-mailed statement today. Imports and the additional local sales will be allocated “similar quantities,” Waite said. Under EU rules, local producers can only sell a limited amount locally. The rest needs to be put to non-food use or exported.
Sugar prices in the EU climbed to 715 euros ($911) a ton in April, the highest since at least 2006, data from the commission showed. In September, the price averaged 708 euros a ton, 57 percent above the world market price for white, or refined, sugar traded on the NYSE Liffe exchange in London. Shortages of sugar resulted in the commission allowing additional supplies of 1.35 million tons in 2010-11 and 1.1 million tons in 2011-12.
“The difference between the EU price and world market price is growing,” Waite said in the statement. “For a fluid market and a market that is more responsive to developments on the world market, additional sugar is needed.”
The European Commission will also allow an additional 700,000 tons of sugar exports, Waite said. That is on top of the 650,000 tons of shipment permits issued in October for the 2012-13 season. Under rules set by the World Trade Organization, the 27-member states bloc can only export 1.37 million tons. Formal votes and decisions on the proposals will take place “later,” Waite said.
Sugar stockpiles in the European Union will drop to 1.5 million tons at the end of the current season from 2 million in 2011-12, according to the commission.
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