London — The International Confederation of European Beet Growers (CIBE) Wednesday urged the EU to take urgent action against subsidized sugar "being dumped on the world market" against the backdrop of what it called an unprecedented crisis in the EU sugar industry.
"EU growers are the most sustainable and efficient growers in the world... [but] they cannot compete against competitors which can use plant protection products banned in the EU...with Brazilian currency depreciation...[and] with the export subsidies implemented by some countries," CIBE said in a statement.
With India poised to announce its strategy for moving its surplus sugar, one source said "subsidies of $150/mt, to force up to 5 million mt onto world market, could well be seen in the coming weeks." Parallel to the unease expressed by CIBE, sugar industry bodies from Brazil and Australia have already been preparing formal complaints to the World Trade Organization, should such subsidy plans come to pass, Reuters reported last week.
For is part, the EU levies out-of-quota import tariffs on white and raw sugar of Eur419/mt and Eur339/mt respectively, while the in-quota tariff for raw sugar is Eur98/mt on quantities up to 677,000 mt.
The CIBE added that the current prices "endanger the farms' financial stability and the resilience of the EU beet sugar sector." Since the EU removed production quotas in October 2017, prices have plumbed historic lows due to global oversupply. EU production contributed to this and shot up to 22.8 million mt in the 2017-18 (October-September) campaign from 16.8 million mt in 2016-17.
Domestic delivered prices were assessed at Eur322/mt ($376/mt) for North Western Europe and Eur338/mt for Mediterranean Europe on September 14, down Eur114/mt (26.1%) and Eur112/mt (24.9%) respectively on the year.
The London No. 5 white sugar futures contract has fallen 13.3% to $323.30/mt over the same period, and in August, the New York No. 11 raw sugar futures contract dipped below 10 cents/lb for the first time in a decade.
