March 11, 2016
Sugaronline | http://goo.gl/t8XcGf
The European Commission appears unlikely to move rapidly to alleviate tight sugar supplies in the EU, with any action expected to be delayed until the summer, according to Reuters.
High internal sugar prices following the lowest beet harvest in more than four decades in 2015/16 have sparked speculation that the EU might take steps to boost supplies.
Trade sources said, however, the Commission might wait until evidence emerged of vessels loading sugar in Brazil under an existing preferential quota for the EU, and until the harvest outlook in drought-hit southern Africa, a supplier to the EU, became clearer.
"They will put off a decision as long as possible," a senior London-based broker said.
The EU sugar management committee is next scheduled to meet later this month but another trade source said no proposal to boost supplies had circulated among the trade so far.
A press spokesperson of the Commission was not immediately available.
Trade sources said availability of sugar in the EU was patchy, with the tightest supplies in regions such as the Mediterranean and Nordic countries.
EU refined sugar in Italy, for example, was quoted at EUR610-620 per tonne this week, some 50% above world white sugar prices, which were US$425.00 a tonne on Thursday.
Some traders said the Commission was debating measures for additional raw sugar imports totalling 150,000 tonnes with reduced duty, as well as reclassifying 150,000 tonnes of so-called out-of-quota production for use as food within the bloc.
This sugar can currently be exported or used only in biofuels or for other industrial non-food applications.
Concerns over European supplies were heightened last month when the EU cleared the way for the export of 700,000 tonnes of out-of-quota white sugar.
Traders were waiting for evidence of loading of at least 300,000 tonnes of contracted "CXL quota" sugar at Brazilian ports.
These are imports of raw sugar cane that has preferential access as a result of negotiations related to the expansion of the trading bloc.
A Platts Kingsman webinar on Thursday referred to market talk that the Commission could authorise some 200,000-300,000 tonnes of reduced-duty imports to the EU, but noted that any figures at this stage were speculative.