Refiners Say EU Sugar Tender Plan Threatens Their Future

European Union plans to import sugar at a reduced duty still forces refiners to pay almost three times as much as the rest of the bloc’s sweetener industry, threatening their viability, according to a refiners’ group.

The EU awarded licenses today to import 100,000 metric tons of raw sugar for refining at a duty of 252.50 euros ($336.36) to 255 euros a ton, the European Commission, the bloc’s regulatory arm, said in a statement.

That compares to the usual duty of 339 euros a ton, it said. The levy paid on an additional 400,000 tons of sugar that the EU allowed local producers to sell within the bloc this season is 85 euros a ton, the commission has said.

“It is difficult to understand the logic behind forcing the refiners into a desperate auction against each other, particularly when their plants are operating at around 60 percent of capacity,” Joao Pereira, president of the European Sugar Refiners’ Association, said in an e-mailed statement.

Today’s tender to import sugar was part of a series of measures approved on Nov. 24 to boost supplies in the EU. The bloc is facing a second year of shortages after imports from a group of least-developed nations that have preferential access to the market fell short of the commission’s expectations.

“The duty free imports forecast by the European Commission have not materialized,” Pereira said. “The consequence of the commission tender is to force refiners’ costs up even further.”

The additional costs paid by the region’s refiners will be added to the final price of white sugar paid by consumers in supermarkets, the refiners association said.

“The cane refining industry simply cannot continue to bear these costs without an impact on our viability and jobs in the long term,” Pereira said.

source: bloomberg