"The European Union of 27 member states has significantly reduced its production in tonnes of white sugar since the sugar reform. This included a drastic reduction in production quotas and European sugar exports to third countries.
The Common Organisation of the Sugar Market (COSM) was radically reformed in 2006. There were three key reasons behind this reform: the integration of the new CAP (Common Agricultural Policy) rules into the COSM; the opening up of the European Market based on agreements between the EU and developing countries; and the application of a decision by the World Trade Organisation (WTO) requiring the EU to reduce its sugar exports.
Goals
The European sugar policy was revised with a view to increasing the efficiency of sugar production by concentrating it in the most productive areas.
The Sugar Regulation that implemented the reforms is based primarily on the following elements:
* a drop in sugar and sugar beet prices,
* the end of sugar production quotas within the framework of a restructuring fund,
* the phasing out of export subsidies.
France’s position
Although one of the most competitive countries in Europe, France, like other European countries, was included in the production reduction strategy, in compliance with the European regulation. As a result, it closed five out of thirty sugar processing plants at the end of the 2007/2008 harvest.
France was the world’s eighth largest producer of sugar behind Brazil, India, China, Thailand, the US, Mexico and Australia, but also Europe’s leading producer before Germany, Poland and the UK. It was also the world’s leading producer of beet sugar and became Europe’s leading producer of alcohol in 2007, while an estimated volume of 15 million hl. This alcohol is increasingly used as fuel (bioethanol).
Opening up the European Market
At the same time, the EU opened up the European sugar market to increasingly large volumes of preferential imports. In 2007/08, the EU imported the following preferential volumes:
* ACP (Africa Caribbean Pacific) countries / LDC (least developed countries) / India: around 1.8 million tonnes,
* Western Balkan countries and Moldavia: 395,000 tonnes,
* All countries, in compensation for the adhesion of Bulgaria and Romania: 528,384 tonnes,
* Miscellaneous: 107,000 tonnes.
In total, EU imports of sugar rose to around 2.7 million tonnes in 2007/2008. This volume is expected to rise over the coming years.
The EU has moved from being a net exported to a net importer. Whereas the EU exported 20% of its production up to 2006/2007, it became the world’s leading importer of sugar in 2008/2009. Its imports currently represent 25% of consumption.
EU of 27: sugar review
The European Union of 27 produced 15.3 million tonnes of white sugar in 2008/09, whereas it produced around 20 million tonnes with 25 member states before the sugar regulation reforms entered into force on 1 July 2006. This included a drastic reduction in production quotas and European sugar exports to third countries.
Uses include dietary consumption and a range of industrial uses: production of alcohol and ethanol, yeast, pharmaceutical and chemical products, etc. These industrial uses tend to represent an increasingly important outlet, particularly with the development of biofuels.