EU to abolish sugar quotas – Increased production and export expected

The European Union abolished the system of agricultural quotas and the minimum price of sugar on October 1, which means that the EU members can now produce sugar in unlimited amounts and that the export will increase as well.

The system of sugar quotas was implemented in 1968 with the first rules of the Common Agricultural Policy (CAP), as a means of supporting producers by setting the level far above the world market price. The decision on abolishing sugar quotas was reached by the European Parliament and the member-states as part of the CAP reform from 2013, following a thorough reform process initiated in 2006.

The average price of sugar in the EU has recovered since late 2016 to around EUR 500 per ton and has been stable for the past few months. Thanks to this, the sector was able to prepare for this moment, and the productivity has considerably improved in the past years.

– I am confident that, since the end date for sugar quotas was decided, the industry has positioned itself well to benefit from the opportunities which the end of sugar quotas presents – stated Phil Hogan, Commissioner for Agriculture and Rural Development.

The abolition of the quota system enables the producers to adjust their production to actual circumstances in the market and to explore new exporting markets. Furthermore, a new Sugar Market Observatory provides short-term analysis and statistics about the sugar market, as well as analysis and outlook to help farmers and processors manage their businesses more effectively.

– The end of the quota system represents an important turning point for our European sugar sector and marks another important step in the market orientation of the Common Agricultural Policy. Producers will now have the opportunity to expand their trade on global markets, and with the right policy supports from the European Commission – such as the Sugar Market Observatory which provides timely and relevant market information – they should have every chance of success – Hogan said.

Following the abolition of quotas, the possibility of collective negotiations on the value sharing terms in the contracts between EU beet producers and sugar processors remains.

The EU is the leading world producer of sugar beet at close to 50% of the total production. However, sugar beet makes up only 20% of the global production of sugar. The remaining 80% is produced from sugarcane. The EU also has a special processing industry which processes imported sugarcane.

EUROPEAN COMMISSION Bruxelles

European Commission

sugar

production of sugar in the EU

import of sugar from the EU

export of sugar from the EU

EU sugar quotas

EU Common Agricultural Policy

CAP

Phil Hogan

sugar beet

sugarcane