African, Caribbean and Pacific (ACP) group stunned by low sugar prices

 

Worker cuts sugarcane in a field that's ready for harvesting.

Worker cuts sugarcane in a field that’s ready for harvesting.

Brussels, April 22, 2015: The ACP Sugar suppliers to the EU market are deeply concerned with the sharp decline in the sugar prices which has come much sooner than expected. This, in ACP’s view, is the direct consequence of the imminent abolition of EU sugar production quotas to which they had strongly objected. The ACP had called for a longer timeline to allow the fragile sugar industries to implement in full the ongoing 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.

Latest sugar prices as of April 21, 2015.

Latest sugar prices as of April 21, 2015.

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. 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 Sugar Group reiterates 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.

Low sugar prices threaten already shaky economies in the ACP group.

Low sugar prices threaten already shaky economies in the ACP group.

The ACP Sugar Group is also apprehensive of the planned greater alignment of EU prices with world market levels which is eminent, 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.

As the Caribbean and other nations within the ACP group deals with declining sugar prices, options have to be considered for extra revenues.

As the Caribbean and other nations within the ACP group deals with declining sugar prices, options have to be considered for new sources of revenue.

The ACP Sugar Group 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. The support program 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 programs already underway to allow them to genuinely attain a level of competitiveness in order to face the market challenges.–OnPointPress.net.