ACP & LDC SUGAR IN THE EUROPEAN MARKET

The history of sugar and trade with the UK are closely linked and have evolved over centuries so much so that, when the UK surrendered its trade policy to the EEC in 1974, it negotiated, as part of the Accession Treaty, a Sugar Protocol. This Protocol maintained and sustained, for a list of ACP countries, a traditional trade that had existed for many years.

The EU has continued to successively reform its sugar regime and eventually renounced the Sugar Protocol with effect from 2009 and granted duty-free and quota free access to a wider group of countries. Since 2009, the EU has continued to grant additional access under new Free Trade Agreements and in October 2017 completed the reform of the sugar regime by removing domestic quotas and thus any restrictions on the amount of domestically produced sugar that can be sold in the EU.

In 2017/18, EU sugar production increased to more than 20.5 million tonnes making the EU a net exporter of sugar. Given that there now are no restrictions on how much tonnage can be marketed internally in the EU, the available market for ACP/LDC sugar industries in the EU reduced and prices in the EU even fell  below the equivalent price on the world market, a market that is itself heavily distorted by subsidies. In the subsequent 2 years production levels fell due to weather and increased incidents of disease following a ban on neoniconitoids, a ban that is currently being eased across Europe.

In January 2020, The UK left the EU. On 1st January 2021, the transitional arrangements ended and the UK opened an annual ATQ for sugar of 260,000 metric at zero tariff for world market price sugar. This ATQ will have a profoundly damaging effect on ACP/LDC sugar trade with the UK and a knock on effect on the value of the wider trade with EU27.

In 2013/14, ACP/LDC exports (Inc South Africa) to the EU over a 12 month period were close to 2.3 million mt. In 2020/21 they were just 793,993 metric tons.

 

Centre Pivot irrigated cane

Centre Pivot irrigated cane

View of Kilombero Sugar Estate, Tanzania 

View of Kilombero Sugar Estate, Tanzania

 

Cane ready to be cut in Belize 

Cane ready to be cut in Belize