The European Union should abolish a 98 euros ($137) a metric ton duty on sugar imports from a group of countries including Brazil and Australia to ensure refiners have “fair access” to raw materials, an industry group said.
The bloc suspended the so-called CXL duty from December 2010 to August this year as it would prohibit the imports under quotas, European Commission spokesman Roger Waite said in April. The EU allowed 500,000 tons of duty-free imports earlier this year, to deal with a shortage of sugar.
“It is essential that European cane sugar refiners have fair access to sufficient raw sugar at competitive prices,” Joao Pereira, chairman of the European Sugar Refiners’ Association, wrote in an e-mailed statement today. “ESRA urges the Commission to permanently abolish the CXL sugar import duty.”
Sugar plants in the continent are operating “well below” capacity due to a shortage of raw materials at a time when refineries have expanded, according to the statement. The ESRA, which represents 19 refiners in Europe, said the situation “is economically crippling for any sugar processor.”
Supplies of raw sugar in the EU fell short of demand after the price in the world market became more advantageous than the price in the bloc, leading countries that usually export the sweetener to the 27-member states to ship elsewhere.
“Given today’s lower EU institutional prices and higher world prices, only the removal of the duty will ensure predictable and economically viable access to raw cane sugar,” Pereira said in the statement.
A group of least developed countries have preferential access to the EU market under the Everything But Arms, or EBA, initiative, which allows a number of countries to export certain amounts of duty-free sugar to the EU. Some nations from the African, Pacific and Caribbean, or APC, group of states also have preferential access under the Economic Partnership Agreement, known as EPA.
Imports from these nations are forecast to reach 1.65 million tons in the 2010-11 season, “far short of the 2.8 million tons the Commission had assumed,” ESRA said. Imports in the 2011-12 season starting Oct. 1 are expected to be 1.7 million tons, down from an original estimate of 3.3 million tons, it said.
“Legal restrictions on supply put cane sugar refiners in a weak and unfair bargaining position when bidding for scarcely available amounts of raw sugar,” ESRA said.