EU Cancels Talks to Boost Sugar Supply as Some Countries Oppose

  • Talks had been planned for May 26 as sugar inventories drop
  • EU sugar users say talks needed, producers welcome decision

The European Union canceled a plan to discuss boosting sugar supplies after some member states opposed the idea even though the region’s stockpiles are headed toward the lowest in at least a decade.

Talks that were initially scheduled to take place at a May 26 meeting have been withdrawn from the agenda, Daniel Rosario, a spokesman for the European Commission, the bloc’s regulatory arm, said by e-mail. The EU had considered allowing at least 300,000 metric tons of additional supplies in the region, people familiar with matter said earlier this month.

"Based on data currently available, there is no reason to change the previous assessment of the market situation," Rosario said. "But many stakeholders and member states do not support action from the commission at this particular moment in the marketing year."

Sugar inventories in the EU will fall to 716,000 tons by the end of September, the lowest since a sugar reform was implemented in 2006, European Commission data show. The figure may still be revised due to low imports, according to a summary of the April 28 management committee meeting. A sugar users’ group last month warned that food makers would face shortages by July if no measures were taken.

Sugar Reform

The EU, once the second-biggest sugar exporter, spent years cutting output after the World Trade Organization ruled it was dumping subsidized sweetener on world markets. With local producers only allowed to sell a certain amount in the domestic market, that left part of EU demand to be met by imports from some countries with preferential access to the bloc.

Shipments from those nations are more than 300,000 tons lower than last season’s level, EU data show. While seven member states were in favor of measures to boost sugar supplies, the same number were against, minutes of the April 28 meeting showed.

"We do not see any justification for the EU commission to table proposals to increase supply of sugar on the EU market," farm lobby Copa-Cogeca said in an e-mailed response to questions. "There is no risk that the EU will suffer from a lack of sugar."

The Committee of European Sugar Users wants talks to still take place. Stockpiles are too low and the commission shouldn’t wait until the “last minute” to consider measures, Robert Guichard, the group’s president, said by phone. Canceling proposals to boost supplies would be understandable if the commission determines demand is falling, he said.

Potential measures that the EU had considered included allowing domestic producers to sell more within the bloc and through import tenders at a reduced duty.

Before it's here, it's on the Bloomberg Terminal.