Confectionery producers don’t anticipate any actual reduction in sugar costs for the brand new sugar advertising and marketing 12 months that begins on 1 September. Sugar is the final EU agricultural sector protected by the market organisation with its protecting tariffs, which is placing strain on small and medium-sized firms particularly.
In response to the EU Fee’s (EC) personal figures on European industrial promoting costs for sugar, the value rose dramatically final 12 months and is at present at an all-time excessive. In June 2023 it was over 80% larger than the earlier 12 months.
The EC expects a slight enhance in manufacturing quantity of 6% to fifteen.5 million tonnes. The BDSI argues that that is nonetheless removed from being sufficient to adequately cowl the European demand of shoppers and the meals business of 17.5 million tonnes.
Germany’s export-oriented confectionery business is being considerably weakened in worldwide competitors resulting from sharply elevated sugar costs in addition to larger power prices at house.
The inflation developments in sure areas are ’selfmade’, mentioned the BDSI, which, along with different sugar processing sectors, has criticised the political construction of the European sugar market.
The sugar market continues to be largely shielded from the world market with excessive protecting tariffs. The few import quotas the EU permits different producers are too rigid and solely out there to European sugar suppliers. The European sugar business should first refine the imported unfinished uncooked sugar into white sugar. Nevertheless, this so-called ‘further refining’ will not be achieved to alleviate the market however to increase the sugar marketing campaign, critics declare.
The BDSI is looking for extra market orientation, consideration of climatic change in European sugar beet cultivation, and a suspension of excessive protecting tariffs in order that sugar can be imported from different areas of the world.
Political countermeasures can be essential to curb the scarcity in the marketplace and worth inflation for sugar. “On this extraordinarily tense scenario for the confectionery business in Germany and the European Union, the EU Fee should lastly act and open the European marketplace for white sugar imports within the quick time period,” mentioned Bastian Fassin, Chairman of the BDSI.
“Regardless of the excessive sugar costs, the EU’s sugar manufacturing continues to be far too low and the provision scenario is in danger. This clearly exhibits that this isn’t doable with out additional import quotas or the suspension of the protectionist EU protecting tariff.”
Along with these short-term measures, the BDSI believes {that a} long-term realignment of the EU sugar market is completely vital.
In April this 12 months, CIUS, which represents the European sugar-using meals and beverage industries with greater than 15,000 firms throughout Europe, mentioned sugar customers face a lack of competitiveness as a result of present sugar market scenario and likewise referred to as for pressing political motion.
The EU sugar provides are tightening constantly, and the high-risk unfavourable situation retains on repeating itself: sugar provides between agricultural years (October-September) are so low that essentially the most susceptible sugar customers (SMEs) face essential scarcity conditions resulting in dramatic financial penalties, comparable to manufacturing facility closures and job losses.
“Not solely do sugar customers have difficulties to move on the necessary worth inflation to their clients within the meals retail sector, however costs are additionally appearing as a serious driver of meals inflation, placing a pressure on shoppers’ budgets wherever this worth inflation happens,” it mentioned. CIUS additionally referred to as for a right away suspension of import tariffs on white sugar to produce the market to keep away from dramatic and irreversible financial penalties to the sugar-using foods and drinks business.
US sugar programme
The issue of excessive sugar import tariffs will not be solely confined to Europe. The US sugar programme can be inflicting shortages for firms that would have an effect on confectionery and sweet manufacturing forward of the necessary Halloween vacation season.
As reported on this publication, US sweet producers mentioned the foundation of the issue lies with US agriculture coverage, which requires at the very least 85% of home sugar purchases to return from home processors, resulting in tight provides and excessive costs when demand rises.
The Nationwide Confectioners Affiliation (NCA), which represents greater than 500 confectionery firms, brokers and suppliers, mentioned in consequence, American companies are pressured to function at a aggressive drawback, paying twice as a lot for sugar as their international rivals – and it’s pushing for modifications to the sugar programme that will assist enhance provide when demand is excessive.
