European Union regulators threatened to allow more sugar into the EU at world-market prices, seeking to force cuts in European production of sugar.
EU producers have applied so far to reduce sugar output by only 700,000 tons in 2007, far short of the forecast cuts of 3 to 5 million tons, Agriculture Commissioner Mariann Fischer Boel said. „Sugar producers who are not competitive should get out now for their own benefit as well as for the overall balance of the market,” Fischer Boel told reporters after a meeting of EU agriculture ministers in Brussels yesterday.
The EU last year agreed to cut the guaranteed price that it pays for sugar by 36%. The EU, the world's second-biggest sugar exporter, is trying to reduce exports after the World Trade Organization barred it from exporting the sugar surplus. The bloc is aiming to end its net sugar exports within a decade. In an effort to scale back overproduction and keep prices from plunging, the European Commission began offering cash earlier this year to sugar factories willing to shut down their operations.
EU sugar stockpiles have mounted after 10 countries joined the bloc in 2004, bringing in additional surpluses. Earlier this month, five new EU nations were fined €57 million ($73 million) for stockpiling too much sugar. Ireland, Italy and Spain have worked the hardest to cut production, while the new EU members haven't proposed a single cut, Fischer Boel said. The deadline to offer cuts is the end of January. (Bloomberg)