EU's removal of sugar quotas is bad news for sugar cane manufacturers

EU's removal of sugar quotas is bad news for sugar cane manufacturers
Shutterstock

The European Union’s sugar quotas, which have been around for nearly fifty years, have been removed at the start of the month. The result is that more sugar can be manufactured and the industry will be able to set the pricing itself.

Higher production, lower prices

CIUS, the European association of sugar-using companies, welcomes the end of the “market-distorting” quotas. Market researchers forecast the sugar productions to grow about a third in the next four years, which in turn will lower prices by about 30 %.  Problems could also surface just like when the milk quotas disappeared in 2015. At that time, plenty of milk farmers sturggled and many had to shut down.

 

In order to avoid such scenarios this time around, the European Union invested 5.4 billion euro into the industry between 2006 and 2010, to prepare it for the end of the quotas. The Sugar Market Observatory was founded, designed to give sugar famers information and to help the market remain relatively steady.

 

Sugar cane manufacturers dissatisfied

Not every sugar manufacturer is happy about the new legislation: sugar cane manufacturers feel they have been constrained compared to the sugar beet farmers. Sugar cane is mostly grown outside of Europe and to help the local market, it has high import tariffs.

 

The end of the quotas will also lead to more cheap sugar and therefore more sugar in food, which may become a health concern. However, the EU believes that a higher production will mostly lead to more export and believes it will not lead to higher European consumption. Nevertheless, there is doubt whether manufacturers will be able to resist the cheap sugar’s call.

Questions or comments? Please feel free to contact the editors


Gerelateerde items

EU guidelines on food donation helpful to reducing food waste

20/10/2017

(Content provided by EuroCommerce) The European Commission adopted yesterday on the World Food Day, EU guidelines on food donation. Retailers and wholesalers welcome these guidelines as supporting efforts to recover and redistribute food to those in need.

Small growth for Metro in 2016/2017

20/10/2017

Metro’s preliminary results show that the German retailer has achieved a 1.6 % growth in its 2016/2017 fiscal year. Even on a like-for-like basis, there was still a slight growth: Metro itself considers it to be a successful year.

Tepid summer leads to weaker ice cream sales for Unilever

19/10/2017

The past summer was not one with a lot of hot days and that has had its effect on Unilever’s ice cream sales. The division’s sales therefore slumped 6.7 %.

Danone alters management structure

19/10/2017

Danone has decided to alter its board structure. The position of chairman and CEO are now both occupied by current CEO Emmanuel Faber.

Difficult third quarter for Carrefour

18/10/2017

Carrefour’s quarterly results illustrate the major challenges the current CEO and his team face, especially in Western Europe. Belgian like-for-like turnover also dropped.

Sainsbury’s will cut 2,000 jobs

18/10/2017

British supermarket chain Sainsbury’s is to cut about 2,000 jobs in the United Kingdom, aiming to save up to 500 million pounds (560 million euro) in an attempt to compete with discounters.

Back to top