Concentrated in France & Germany
metric tons, raw value equivalent, for 2009/10 (Figure1). This includes 16.4 million tons of beet sugar and 0.4 million tons of cane sugar, mainly from France’s overseas departments (Reunion, Guadeloupe and Martinique) and Portugal’s Azores.
Nearly 1.6 million hectares (4.0 million acres) of sugarbeets were planted last season, with the three largest producers — France, Germany and Poland — accounting for about 60% of total beet area. According to the European Committee of Sugar Manufacturers (CEFS), there are 162,244 beet growers in the EU, including France with 26,000, Germany with 34,436 and Poland with 40,988 growers.
Sugar production for 2009/10 was up 20% from the year
before and reflected record sugarbeet production — which was attributed to near-ideal year-long growing conditions throughout the major producing areas in Western Europe. France in particular had strong yields (Table 1).
EU sugarbeet area for 2010/11 is reported to be down slightly, and growing conditions have been more challenging compared to last season’s near-perfect weather. The European Commission reports that the EU had prolonged dry weather through early July. Rainfall in northern France, Belgium, the Netherlands and western Germany — the main growing areas in the EU — was 60 to 80% below normal. With a somewhat reduced area planted to beets and lower yields, sugar production is expected to be down by 2.0 million metric tons to a forecasted 14.8 million tons (including 0.3 million tons of cane sugar).
According to various sources, in the late 1960s the EU-6 came under the umbrella of the EU sugar regime, which was part of the Common Agricultural Policy (CAP). All national sugar policies of the members were abolished for the overall EU sugar regime. The main features of the regime were as follows:
• Production quotas for every producing country.
• Fixed prices for sugarbeets and sugar.
• Variable tariffs to protect against imports from the world market.
• Mechanism to export surplus production to the world sugar market through levies paid by the sugar producers on sugar sales.
• Production quotas given to producers of HFCS, thereby limiting market growth.
These policies made it possible to run the sugar regime at practically no cost for the government. Over time, the EU’s sugar regime was criticized both internally and externally for its overproduction, regulated prices, export subsidies and discriminatory trade practices. The sugar regime also was very profitable, as EU sugar sold at prices three times higher than the world price. This encouraged expansion in production — even in adverse agronomic areas for sugarbeets.
The oversupply of EU sugar led to five to six million tons of surplus sugar being placed on the world market, suppressing world prices. The EU offered export subsidies to close the gap between the world price and internal prices. In 2004 the World Trade Organization (WTO) ruled that the EU had been cross-subsidizing its out-ofquota surplus sugar.
In 2006 the EU adopted a farreaching reform of its sugar policy. The main objectives were:
• Inclusion of sugarbeet agriculture in the reform of the CAP by reducing the price of beets, as had been done with grains. Initially, beet prices were reduced by 45% and the sugar price was reduced by 36%.
• Allocation of sugar production quotas to the most efficient growing regions via a restructuring of the sugar sector.
Sugarbeets are sliced at 108 processing plants across the community, with France, Germany and Poland having a combined 64 plants. Recent trends include consolidation of ownership of a number of processing plants as well as the closure of some plants.
The number of beet processing companies and raw sugar refining companies has declined from 78 in 2000/01 to 59 today. The largest companies are Sudzucker, Nordzucker and British Sugar, which combined account for about half of the EU’s market share.
The EU-27 sugar reform has resulted in substantial changes in the refining of raw cane sugar. Prior to the reform, only dedicated sugar refineries were allowed to refine imported raw sugar. This restriction was lifted in 2009, so now beet sugar factories are able to refine raw cane sugar.
For 2010/11, EU imports are forecast to total 3.6 million metric tons, of which 3.0 million are raw sugar imports and 0.6 million are refined sugar, raw value. The leading source of these imports in 2009 was Brazil, supplying 25% of raw sugar imports and 28% of refined sugar, says the ISO.
EU exports of refined sugar for 2010/11 are forecast at 1.5 million metric tons. The leading destinations of EU refined sugar exports in 2009 were Israel (22%), Algeria (16%) and Norway (10%), according to ISO.
With respect to sugar trade policy, the EU has two schemes for preferential trade. The Everything But Arms (EBA) initiative allows duty-free access to EU markets for the world’s least-developed countries. Second is the Economic Partnership Agreements (EPAs) with ACP countries. EPAs refer to African, Caribbean and Pacific countries (excluding South Africa), many being former European colonies. Countries eligible under these two schemes can export to the EU without paying any tariffs.
USDA reports that the EU has recently signed free trade agreements (FTAs) with Columbia and Peru and a new EU-Central America Association Agreement. All these agreements include EU concessions for sugar imports and are now being ratified and implemented.
Over the past decade, 147 sugar factories — nearly two-thirds of the total — have been closed. In addition, since 2004 reportedly 140,000 — 45% — of sugarbeet growers have left the industry. These significant changes, while causing massive economic dislocations, also have led to a much leaner and more competitive EU sugar industry.