EU Sugar Market
(Source: European Commission)
The European Union is the world’s biggest producer of beet sugar and the principal importer of raw cane sugar for refining. The EU sugar market is regulated by production quotas, a minimum beet price and trade mechanisms.
The EU is the world’s leading producer of beet sugar, with around 50% of the total. However, beet sugar represents only 20% of the world’s sugar production; the other 80% is produced from sugar cane.
Most of the EU’s sugar beet is grown in the northern half of Europe, where the climate is more suited to growing beet. The most competitive producing areas are in northern France, Germany, the United Kingdom and Poland. The EU also has an important refining industry that processes imported raw cane sugar.
Sugar factories are required to pay farmers a minimum price of EUR 26.29 per tonne for sugar beet for the production of quota sugar. Out-of-quota sugar beet does not benefit from this minimum price.
The EU reference threshold for white sugar is fixed at EUR 404.4 per tonne and EUR 335.2 per tonne for raw sugar. Private storage aid can be activated on the basis of the reference threshold, market prices, cost and margins.
Since the reform of the sugar market regime, the EU has become a net importer of sugar. Imports are mainly in the form of cane sugar for refining, from the African, Caribbean and Pacific states (ACP) and Least Developed Countries (LDC) which benefit from quota-free, duty-free access to the EU market.
For the ACP non-LDC countries a safeguard clause will remain in place until 2015. This is triggered if more than 3.5 million tonnes of sugar are imported into the EU in a single year, which has not been the case since the measure started in 2009.
In addition, the EU has several sugar import quotas that allow a total of about 1 million tonnes of reduced- or zero-duty imports each year. The main beneficiaries are the Balkans and Brazil.
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