• The struggle to source raw materials is threatening the sugar refining sector in Europe

The current situation

The recent years have seen massive changes take place in the EU sugar sector, since the abolition of quotas in September 2017. The result of this was a sharp increase in beet sugar production in the EU, depressing price levels for white sugar.
EU cane refiners – like all European sugar producers – continue to face an extremely difficult commercial environment as a result.

However, unlike our competitors, the costs of our raw materials have remained largely in line with past years, seeing no significant reduction. One major reason for this is the imposition of tariffs on the vast majority of raw sugar imports to the EU.

Historically, cane refiners had access to raw sugar through a number of sources. The bulk of imports came from Africa-Caribbean-Pacific countries and least-developed countries (ACP and LDC) through the Everything But Arms (EBA) agreement as well as under Economic Partnership Agreements (EPA). However, a massive amount of this supply has been ruled out as the raw sugar from these countries often costs more than EU white sugar prices. Similarly, for sugar sourced through the WTO’s CXL tariff-rate quotas (TRQs), the imposition of the €98/tn duty renders this source a less competitive alternative for European cane refiners.

The duty-free access to raw sugar through TRQs in trade deals with main producers, such as Australia and the Mercosur countries, is the only means to guarantee a sustainable EU sugar sector across the vectors of security of supply, price, employment, and the production of the sugar itself.

For our sector, the ongoing talks with Australia and the ratification of the EU-Mercosur deal are a last chance to secure access to the raw materials that we desperately need to keep our businesses alive.