ACP countries alarmed at collapse in sugar prices

Sugarcane-Field-740BRUSSELS, Belgium, Friday April 10, 2015, CMC – African, Caribbean and Pacific (ACP) sugar suppliers have expressed concern with the sharp decline in the prices for the commodity on the European markets.

The Brussels-based ACP Secretariat said this is the direct consequence of the imminent abolition of EU sugar production quotas to which sugar producing countries had strongly objected.

The ACP had called for a longer timeline to allow the fragile sugar industries to implement in full the on-going massive restructuring and reform programme with the support of EU funds.

The EU Beet Growers Confederation had also supported the extension of the quota regime to at least up to 2020.

The majority of the ACP sugar-supplying states have initialed and signed Economic Partnership Agreements (EPAs) based in part on the expectation of the long-term outlook for the EU sugar market, in terms of access and maintenance of stable and remunerative sugar prices in a regulated EU sugar market.

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“The EU decision to abolish sugar quotas prematurely therefore seems to contradict and undermine the EPA objectives and the concept of policy coherence for development to which the EU is strongly committed, and which is a fundamental aspect of the Cotonou Partnership Agreement,” the ACP said.

The ACP Sugar Group said it is reiterating an earlier position that the value of the preference enshrined in these treaties depends on a combination of a guarantee of access and stability of price in the EU market and has long been crucial to the security of ACP sugar export earnings.

These, in turn, underpin the ability of the many of the small and vulnerable economies to import other products, which help to provide food security. More importantly, thousands of small sugar growers in ACP countries continue to depend on these earnings for their livelihood. The importance of this key commodity to Economic Partnership Agreement signatories and the Least Developed Countries has been set aside in the latest EU sugar reform of 2013.

The ACP Sugar Group said it “is also apprehensive of the planned greater alignment of EU prices with world market levels which is imminent, and, according to the EU’s own forecast, will be at levels rendering the preferences granted under the EPA almost, if not completely, valueless.

“Planning and investment decisions for sugar cane require a view of market conditions well beyond 2017. The ACP Sugar Group is concerned that several imminent intertwined factors could materially influence their prospects as sugar suppliers to the EU.”

The ACP Sugar Group said while it has appreciated the innovative accompanying support programme, initiated and funded by the EU, granted to the former ACP sugar protocol States, however, significant constraints relating to implementation in terms of management and slow disbursement of the funds continue to pose serious challenges.

It said the support programme is far from providing the so called “soft landing” as has been widely claimed.

“The ACP countries had consistently warned the EU that the abolition of EU sugar production quotas in 2017 will lead to drastic price reductions and major market instability which will seriously undermine the substantial investments in the reform and adaptation processes of their sugar industries.

“The ACP sugar suppliers strongly believe that they would continue to need additional support to complete the much needed reform programmes already underway to allow them to genuinely attain a level of competitiveness in order to face the market challenges,” the ACP Secretariat here said.

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