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EU Sugar Market: Current Situation and Policy Reform Presented by LMC International Belgrade, 27 May 2004. Presentation Format. Current market situation and policy Options for policy reform. EU Sugar Regime (to 2005/06). Key Features: Production quotas Support (intervention) prices

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Eu sugar market current situation and policy reform
EU Sugar Market:Current Situation and Policy Reform Presented by LMC InternationalBelgrade, 27 May 2004


Presentation format
Presentation Format

  • Current market situation and policy

  • Options for policy reform


Eu sugar regime to 2005 06
EU Sugar Regime (to 2005/06)

Key Features:

  • Production quotas

  • Support (intervention) prices

  • Market access arrangements


Eu supply demand balance 000 tonnes white value
EU Supply Demand Balance(‘000 tonnes, white value)


Production quotas
Production Quotas

  • Quantity for sale at support prices (A and B quota)

  • Additional production exported to world market (C sugar)


Support prices
Support Prices

Guaranteed prices set for:

  • EU beet sugar quotas

  • Raw cane sugar imports

  • Basic beet price



Preferential access
Preferential Access

Raw sugar:

  • Sugar Protocol (ACP); EBA; MFN; SPS

    White sugar:

  • Western Balkans



Eu border protection
EU Border Protection

  • No imports enter EU outside of preferential arrangements

  • White sugar tariff €419 per tonne

  • Plus safeguard duty (€117/mt at world price of US$230/mt)


Presentation format1
Presentation Format

  • Current market situation and policy

  • Options for policy reform


Pressures for reform
Pressures for Reform

  • WTO Doha Round

  • WTO challenge

  • Access arrangements

  • Internal reform process


Eu regime post 2005 06
EU Regime – Post 2005/06

Influences:

  • Likely outcomes from the WTO Doha Round

  • EU Commission policy options


Eu commission s reform options
EU Commission’s Reform Options

  • Status Quo/Fixed Quotas

  • Price Cut

  • Full Liberalisation


Status quo fixed quota option
Status Quo/Fixed Quota Option

  • Supply managed by quotas

  • Requires supply restraint by countries with duty-free access

  • Higher prices maintained


Price cut option
Price Cut Option

  • Supply managed by price

  • Quotas phased out

  • Leads to large price cut


Liberalisation
Liberalisation

  • Removal of quotas and tariffs

  • Substantial price cut


Eu price mechanism
EU Price Mechanism

  • Fixed Quotas: WTO commitments dictate price

  • Price Cut: EU manages prices

  • Liberalisation: World price



Wto challenge
WTO Challenge

Challenge to:

  • Export subsidies on re-exported raw sugar imports

  • Cross-subsidisation of C sugar

    Potential impact on quotas and production, and support for Fixed Quota option


Eu price outlook
EU Price Outlook

  • Price Cut Option: - 38%

  • Fixed Quotas Option: - 17%

  • Liberalisation: - 52%

  • Serbia – 160,000 tonne initiative falls within Fixed Quotas agenda