EU sugar supply deficit threatens Irish industry, says trade group
Thomas Burke, a spokesperson for Food and Drink Industry Ireland (FDII), told ConfectioneryNews.com that the industry group was not aware of any production lines that have been shut down as a result of the EU sugar shortage.
“However, our member companies are finding it increasingly difficult to source sugar on markets and if the current situation persists it will inevitably lead to major production difficulties in the not too distant future,” he stressed.
World market sugar prices reached a 30-year high in November and 2011 will be the third year that global production/consumption has been in deficit, said the FDII, with the trade group adding that the tightness in supply has been exacerbated by recent indications from the EU that it would be issuing 350,000 tonnes of export licences for sugar.
“This means that a large quantity of sugar will exit the EU, which is particularly unhelpful at a time when sugar supplies are scarce,” said FDII director Paul Kelly.
Echoing comments from the European trade body CIUS on the issue, Kelly called for this sugar not to be exported and urged the Irish government delegate to persuade the EC sugar management committee of the seriousness of the issue during today’s deliberations in Brussels.
"Most of the sugar consumed in Ireland is produced in the EU, which still operates import tariffs. While EU sugar refiners have covered 90 per cent of their requirement, high prices and availability problems now mean there is a shortage of supply.
In Europe as a whole, there is not enough sugar to cover existing supply contracts,” added Kelly, who criticised the sugar management committee for postponing a decision on the export licences on two occasions in recent months.
“This uncertainty is not helping the situation,” stressed the FDII director.
Burke told this publication that the measures outlined by CIUS at the end of last year would help to alleviate the current difficulties in the market and would assist its members in providing security of supply of a very important ingredient.
In November, the CIUS urged the Commission to make a negative withdrawal to keep the 350,000 tonnes of out-of-quota sugar within the bloc and also to consider further steps to ensure that market balances are maintained, such as a temporary tariff rate quota on world market imports.
Kelly added that end-manufacturers are facing ongoing anxiety in regard to maintaining production levels due to the fact that basic foodstuff commodities are subject to speculation and supply constraints: “Volatility is here to stay and problems are unlikely to ease until at least next year’s harvest, especially as traders remain attracted to foodstuff commodities."
