marie-christine ribera, cefs director-general european committee of sugar manufacturers sectoral...
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Marie-Christine Ribera, CEFS Director-General
European Committee of Sugar Manufacturers
SECTORAL SOCIAL DIALOGUE COMMITTEE SECTORAL SOCIAL DIALOGUE COMMITTEE FOR THE SUGAR INDUSTRYFOR THE SUGAR INDUSTRY
PLENARY SESSION
28 February 2011
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OVERVIEW
I. Industry Response to the Sugar Reform
II. The EU Sugar Market 2010/2011
III. The Court of Auditors Special Report
IV. CAP After 2013: CEFS Priorities
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I. EU Sugar Reform Agreement of 2006
Most challenging and radical reform in the history of the Common Market Organisation for sugar:
Sugar reference price cut by 36%Beet price cut over 40%Quota cuts by one thirdExports cuts from 6-8 MT to 1 MTDoubling of imports
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I. Industry Response to the Reform EU Price Cuts: €3 to 4 billion reduction per year
of the bill paid by customers EU Sugar Quotas:
Ambitious restructuring schemeEU quotas reduced by nearly 6 million tonnes5 countries have completely closed their sugar
industry6 additional countries have lost over 40 % of their
national quotas
Major driver to reduce costs, increase efficiency and rationalise across EU industry
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I. Industry Response to the Reform
Factory rationalisation: 147 factories closed since 2000 in EU (-60%) 80 factories closed since 2006Only 106 remaining in 2010 out of 251 in 2000More than 20,000 direct jobs lost
Fundamental changes in refining operations:No longer restricted to a small number of
historic refinersNew refineries being builtBeet factories encouraged to “co-refine”
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II. EU Market Balance: 2010/2011
ACP/LDCs unrestricted exports to the EU EU sugar market influenced by one world
dominant player: Brazil Agriculture: Sugar = Commodity influenced by
climatic conditions
World markets are dominated by Brazil (more than 50% of world exports), influenced by Indian position
EU wants to rely more on imports
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II. EU Market Balance: 2010/2011
Exceptional higher world market prices -White sugar London N. 5 on 9th February: 761$ = 558€/t; EU average at November 2010 487 €/t, on 28th Feb., 726$=527€/t- reflecting the world tight situation: World markets on 2 years of shortage. 2010/2011 possible slight surplus??
ACP/LDCs difficulties to export to the EU: EC forecast for 09/10 1,5 mln t.
EU “ordinary” year compared to last year
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II. CEFS Position and Actions
In the event of tight supply on the EU sugar market:
Joint CIBE/CEFS Letter of October 2010 to Commissioner Ciolos:
Should the Commission consider it necessary
and market conditions prove it to be so, the EU sugar producers are ready to be part of the solution
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II. CEFS Position and Actions
Joint CIBE/CEFS Letter of February 2011:
1. EU sugar production should be given the priority when considering additional import concessions.
2.Commission should not lose sight of the 2011/12 campaign given the tight situation on the world market (new export tranche under 2010/11 EU export commitments at WTO, using 2011/12 sugar production).
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II. EU sugar balance: 2010/2011-11/12
Need for anticipating 2011/12 before sowing decisions, i.e. now:
Management Committee of 28.2.2011 crucial for EU sugar balance 2010/2011
EU Commission choices in next weeks and months will be decisive for the EU sugar Balance 2011/2012
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III. Special Report (6/2010) of the EU Court of Auditors:
“Has the reform of the sugar market achieved its main objectives”?
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Statement of the EUROPEAN COURT OF AUDITORS 10.11.2010*:
“With regard to the competitiveness of the EU sugar industry… the reform process has not fully ensured the future
competitiveness….”
Statement EU COMMISSION 18.11.2010**:
“Several options for the future… to bring about increased efficiency and greater competitiveness for the sector.”
*Source: PRESS RELEASE EUROPEAN COURT OF AUDITORS; Special Report: Has the reform of the sugar market achieved its main objectives?
**Source: COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS; The CAP towards 2020
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III. Special Report of the Court of Auditors
Some thoughts on the Report:
CEFS positions recalled: EU imports policy, available tools in case of undersupply, exports above WTO limits,…
Court position: need to get rid of the rigidities and constraints of current quota system.
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III. Special Report of the Court of Auditors EU Market Balance:
• Court of Auditors: “EU production covering 85 % of its consumption”“increasing the EU dependence on imports” (§ 81)
• Commission Reply:“the regime incorporates the necessary instruments to deal with hypothetical situations of undersupply of the EU market mainly by converting available out-of-quota sugar into quota sugar.” (§ 58).
• CEFS position: Priority to EU production in comparison to imports. 85% of EU Consumption should be maintained.
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III. Report of the Court of Auditors
EU Market Balance: Imports/exports• Court of Auditors: “increase in imports [….] would
have an adverse impact […]further reducing the EU’s sugar production capacity and likely resulting in additional factory closures” (§57)
• Commission Reply: “not all EU sugar exports but only subsidized exports should be kept within the limit imposed by the WTO ruling” (§ 7)
• CEFS position: EU needs to have the same freedom to export as any other trading region in the world
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CEFS PRIORITIESIV. CAP POST-2013 CEFS IV. CAP POST-2013 CEFS PRIORITIESPRIORITIES
1- Imports management 1- Imports management policy policy 2- EU supply management2- EU supply management3- 3- Freedom to export Freedom to export 4- EU sugar beet contracts4- EU sugar beet contracts 5- CAP budget contribution5- CAP budget contribution
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Thank you for your attentionThank you for your attention
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