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Wednesday, 06 May 2015

EU sugar glut: sugar cane versus beet sugar

The sugar landscape in the EU is changing. A glut in the European sugar market is driving to the closure of some factories e.g. Saint Louis Sucre, the Sugar producer who is part of Suedzucker shall shut its cane refining operations in Marseilles later this year;  Tate & Lyle Sugars are operating at partial capacity; small refineries in Bulgaria have closed. Additionally, cane sugar refiners are facing tough times ahead as the EU shall end production quotas on beet sugar in October 2017. In 1973, the EU turned itself around from being a net importer of sugar to a net exporter, in part, due to the incentives of the EU’s Common Agricultural Policy (CAP). The majority of EU sugar now comes from beet some cane sugar refiners. Upon entry into the EU market, CXL import duties (of €98 per tonne) apply on cane sugar. Can sugar refiners in the EU contest that this disadvantages them in comparison to beet refiners.