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Sugar Sell-off

  • December 9th, 2006
  • Posted by EUEditor

sweets-fats-repl.jpgThe last “sugar mountain” is to go? The European Commission plans to sell 855,000 tonnes of sugar on world markets, to dispose of remaining intervention stocks, held over since its new marketing system started last July.

The plan will see producers being compensated for giving up substantial amounts of quota, as the trade moves onto the new EU system of direct payments.

Buying surplus product into intervention stocks will be ended. (For additional background, see EUAustralia 16.11.06, 22.11.06).

Before the change on 1.7.06, 1.878-million tones had been bought into intervention in twelve member states of the EU, and one million of that total was later sold back into the European market.

The rest will now be sold by tender on export markets, in order to use export posstibilites allowed by the World Trade Organisation (WTO), (1.374-million tones can be sold annually under that authority).

Producers were told that funds would not be available to pay a subsidy on the export sales, as the support budget was heavily committed for compensation against quota reductions.