| EU to U.S.: Don’t Make Same Sugar Mistake |
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| The Sugar Beat |
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In 2005, the European Union (EU) overhauled its sugar policy, sharply cutting back domestic production and increasing its reliance on imports. Now six years later, amidst European sugar shortages, leaders of the EU sugar industry are sending a clear signal to the United States: “Don’t make the same mistake.” The warning came during the 28th International Sweetener Symposium in August, and it was delivered by Stefan Uhlenbrock, a German commodity analyst, and Marie-Christine Ribera of the European Committee of Sugar Manufacturers. Uhlenbrock, who is with F.O. Licht and presented at the Symposium, called Europe’s decision to favor imports to homegrown supply, “a recipe of disaster” because many of the foreign countries the EU was depending on are not delivering the needed sugar quantities. In fact, Reuters reported in June, “Some German retailers are limiting the amount of sugar that customers can buy to 4 kilogrammes per purchase due to a shortage.” Ribera explained the “shock to the system” felt by Europeans in an interview with The Hagstrom Report following the Symposium. “In a record time—three years—we had to reduce our output by one third—minus 6 million tons,” she said, noting the associated job loss. “One factory out of two literally closed in this period and over the last 10 years we lost 60 percent of our production capacity,” she said during the interview. “One thing I would not wish our American friends is to go through such a drastic reform.” Patrick Chatenay, a London-based agricultural consultant who has worked closely with EU sugar producers, agrees. “The dismantling of EU sugar policy held unexpected consequences, one of which was to dramatically increase supply uncertainty and price fluctuations,” he explained. “Sugar is a vital ingredient in the food supply and in key biochemical processes, and to hand over control of its supply to foreign nations isn’t wise. As seen in the very recent past, food commodity export bans do happen.” Since the EU sugar policy change, just 18 of the EU’s 27 member states have continued to produce sugar, down from 23 in 2005, according to a July 8 International Sugar Journal article. Only France, Denmark, the Czech Republic, and Benelux are still producing a surplus, the article noted, and the resulting concentrated industry in the EU has left some of the 18 states producing just half the amount of sugar as before. Susanne Langguth of the German-based Suedzucker Ag, one of the remaining EU sugar producers, told The Hagstrom Report, “we are looking from the EU perspective quite positively towards the U.S. sugar program.” Amazingly, a handful of lawmakers in the United States are seeking to follow the EU model of eliminating domestic production in favor of subsidized foreign imports. This, sugar leaders in the United States say, would be a serious blow to the country’s food security. Unlike Europe and many other nations around the globe, the United States hasn’t experienced shortages in recent years. The U.S. Department of Agriculture is actually projecting significant surplus sugar stocks at the end of the year. This stability, the fact that U.S. sugar policy operates at no cost to taxpayers, and the economic success being seen by all involved—even U.S. policy opponents—are all reasons for continuing the current policy and avoiding the EU’s mistakes, say U.S. sugar producers. |
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