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EU to import duty-free sugar for biofuels, drugs, chemicals

European Union member states approved a plan to import 200,000 metric tons of sugar without tariffs, destined for producers of drugs, chemicals and biofuels.

Approval came yesterday from the 27-nation bloc's sugar management committee, which oversees the internal sugar market and subsidies for production. The decision still needs the approval of the European Commission, the executive arm. „The quota shall only be used for the manufacturing of industrial products - chemicals, pharmaceuticals, alcohol, bio-ethanol,” the EU said yesterday in an e-mailed statement.

The EU has sought to reduce sugar production since a 2005 World Trade Organization ruling that curbed the bloc's subsidized exports of the sweetener. Yesterday's decision will combine with a cut in the amount of subsidized sugar EU farmers and processors can produce, increasing their exposure to the world market and bolstering the EU's free-trade credentials.

Biofuels are derived from crops including sugar, and the sweetener is also used in the production of pharmaceuticals and chemicals such as enzymes. Under WTO rules, the EU can export 1.37 million tons of subsidized sugar a year, with a value capped at €513.9 million ($669.7 million). (Bloomberg)