ANNOUNCED AS TEMPORARYNo
On January 27, 2010 the European Commission proposed additional export of 500,000 tons of out-of-quota sugar in marketing year 2009/2010 (i.e. until July 31, 2010). According to the Commission's Press Release Np. IP/10/59 this measure is considered by the Commission as temporary and is taken due to exceptional market situation. Unfavourable weather conditions in some major sugar producing countries such as India and Brazil cause the stocks to deteriorate and world price of sugar to increase. This coincided with the end phase of restructuring of EU sugar sector, which made some uncompetitive producers leave the market and thus contributed to contracting production. On the other hand, good harvest of 2009 in the EU led to higher than expected production of out-of-quota sugar.
On February 3, 2010 the Commission published a draft regulation, Commission Regulation (EU) No. 94/2010 fixing an additional quantitative limit for the exports of out-of-quota sugar in respect of marketing year 2009/2010, which laid down the markets to which the out-of-quota sugar can be exported and rules on licences for exporters.
On February 25, 2010 the Commission approved export licences for the last 99,871 tons of sugar, completing the quota.
The move triggered protests from major sugar producers such as Australia, Brazil and Thailand that voiced their concerns at the WTO Dispute Settlement Body meeting on February 18, 2010. The additional out-of-quota sugar makes the overall EU's out-of-quota sugard exports exceedthe 1,273,500 tons ceiling agreed under the WTO Agreement on Agriculture for Marketing Year 2009/2010. The Commission justifies its decision claiming that the world price of sugar exceeds its production cost.
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