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Marie-Christine Ribera, CEFS Director-General European Committee of Sugar Manufacturers SECTORAL SOCIAL DIALOGUE COMMITTEE FOR THE SUGAR INDUSTRY PLENARY SESSION 28 February 2011
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OVERVIEW I. Industry Response to the Sugar Reform II. The EU Sugar Market 2010/2011 III. The Court of Auditors Special Report IV. CAP After 2013: CEFS Priorities 2
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I. EU Sugar Reform Agreement of 2006 Most challenging and radical reform in the history of the Common Market Organisation for sugar: Sugar reference price cut by 36% Beet price cut over 40% Quota cuts by one third Exports cuts from 6-8 MT to 1 MT Doubling of imports 3
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I. Industry Response to the Reform EU Price Cuts: €3 to 4 billion reduction per year of the bill paid by customers EU Sugar Quotas: Ambitious restructuring scheme EU quotas reduced by nearly 6 million tonnes 5 countries have completely closed their sugar industry 6 additional countries have lost over 40 % of their national quotas Major driver to reduce costs, increase efficiency and rationalise across EU industry 4
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I. Industry Response to the Reform Factory rationalisation: 147 factories closed since 2000 in EU (-60%) 80 factories closed since 2006 Only 106 remaining in 2010 out of 251 in 2000 More than 20,000 direct jobs lost Fundamental changes in refining operations: No longer restricted to a small number of historic refiners New refineries being built Beet factories encouraged to “co-refine” 5
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II. EU Market Balance: 2010/2011 ACP/LDCs unrestricted exports to the EU EU sugar market influenced by one world dominant player: Brazil Agriculture: Sugar = Commodity influenced by climatic conditions World markets are dominated by Brazil (more than 50% of world exports), influenced by Indian position EU wants to rely more on imports
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II. EU Market Balance: 2010/2011 Exceptional higher world market prices - White sugar London N. 5 on 9 th February: 761$ = 558€/t; EU average at November 2010 487 €/t, on 28 th Feb., 726$=527€/t - reflecting the world tight situation: World markets on 2 years of shortage. 2010/2011 possible slight surplus?? ACP/LDCs difficulties to export to the EU: EC forecast for 09/10 1,5 mln t. EU “ordinary” year compared to last year
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II. CEFS Position and Actions In the event of tight supply on the EU sugar market: Joint CIBE/CEFS Letter of October 2010 to Commissioner Ciolos: Should the Commission consider it necessary and market conditions prove it to be so, the EU sugar producers are ready to be part of the solution
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II. CEFS Position and Actions Joint CIBE/CEFS Letter of February 2011: 1. EU sugar production should be given the priority when considering additional import concessions. 2.Commission should not lose sight of the 2011/12 campaign given the tight situation on the world market (new export tranche under 2010/11 EU export commitments at WTO, using 2011/12 sugar production).
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II. EU sugar balance: 2010/2011-11/12 Need for anticipating 2011/12 before sowing decisions, i.e. now: Management Committee of 28.2.2011 crucial for EU sugar balance 2010/2011 EU Commission choices in next weeks and months will be decisive for the EU sugar Balance 2011/2012
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III. Special Report (6/2010) of the EU Court of Auditors: “Has the reform of the sugar market achieved its main objectives”?
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Statement of the EUROPEAN COURT OF AUDITORS 10.11.2010*: “With regard to the competitiveness of the EU sugar industry… the reform process has not fully ensured the future competitiveness….” Statement EU COMMISSION 18.11.2010**: “ Several options for the future… to bring about increased efficiency and greater competitiveness for the sector.” *Source: PRESS RELEASE EUROPEAN COURT OF AUDITORS; Special Report: Has the reform of the sugar market achieved its main objectives? **Source: COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS; The CAP towards 2020
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III. Special Report of the Court of Auditors Some thoughts on the Report: CEFS positions recalled: EU imports policy, available tools in case of undersupply, exports above WTO limits,… Court position: need to get rid of the rigidities and constraints of current quota system.
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III. Special Report of the Court of Auditors EU Market Balance: Court of Auditors: “EU production covering 85 % of its consumption”“increasing the EU dependence on imports” (§ 81) Commission Reply:“the regime incorporates the necessary instruments to deal with hypothetical situations of undersupply of the EU market mainly by converting available out-of-quota sugar into quota sugar.” (§ 58). CEFS position: Priority to EU production in comparison to imports. 85% of EU Consumption should be maintained.
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III. Report of the Court of Auditors EU Market Balance: Imports/exports Court of Auditors: “increase in imports [….] would have an adverse impact […]further reducing the EU’s sugar production capacity and likely resulting in additional factory closures” (§57) Commission Reply: “not all EU sugar exports but only subsidized exports should be kept within the limit imposed by the WTO ruling” (§ 7) CEFS position: EU needs to have the same freedom to export as any other trading region in the world
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CEFS PRIORITIES IV. CAP POST-2013 CEFS PRIORITIES 1- Imports management policy 2- EU supply management 3- Freedom to export 3- Freedom to export 4- EU sugar beet contracts 4- EU sugar beet contracts 5- CAP budget contribution
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Thank you for your attention CEFS Avenue de Tervueren, 182 1150 Bruxelles Visit our website: www.cefs.org 17
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