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COMMENT BY HARTWIG FUCHS
Accelerating towards a new
world of sugar
Two years, four years or seven years: how much time will the
EU allow for changing the system of the EU sugar sector – a
sector which is in many areas still dealing with the aftermath
of the drastic reforms carried out between 2006 and 2009? At
the end of June, we learned the answer: after four more campaigns,
Nordzucker will enter a new sugar industry – without
a market regime. We have been given two more years than
originally feared to prepare for the change – but three years
less than we would have liked. A compromise. No reason to
celebrate, but also no cause to stick our heads in the sand.
Quite the opposite!
How will things proceed
from 2017?
Following the drastic reforms in 2006, the time following the end
of the sugar market regime will once again present major challenges
for beet farmers and the sugar industry in the EU. The focus of
the coming years will also be on boosting the efficiency and competitiveness
of beet cultivation and sugar production. In addition to
this, new systems of contracts for beet cultivation will be required
to be able to manage the two-year period between crop planning
and sugar sales without the market regime instruments which had
previously applied. Nordzucker will continue to negotiate beet
cultivation and delivery terms with the agricultural associations. A
key issue will be what forms of price hedging for sugar will be in
place in four years. Under consideration are systems such as those
commonly used for rapeseed and wheat, for instance. Protection
against sugar imports to the EU which will remain valid after 2017
is also important for sugar production in Europe. This means that
sugar must continue to be excluded from talks on bilateral and
multinational trade agreements.
sdp
Quickly becoming more commercial and competitive
Nordzucker must become more commercial and competitive
at a much quicker pace. That’s the key message! The fact that
we have the strength required for this is a testament to the
enormous progress we have made in recent years. We set
our course early on – to improve efficiency and profitability
on a continuous basis. Now it is for us and our beet farmers
to continue on this path with dedication and resolution. And
now we have a fixed deadline – which is good for us all.
With the discontinuation of the quota system and the
WTO export limit, the EU market will be influenced to a
greater extent by events in the global market after 2017. The
EU currently covers around 85 per cent of the sugar required
for the food industry from domestic production. After 2017,
all of the sugar produced in the EU will be available for use
in food. Moreover, we will be in greater competition with isoglucose
among our customers as this will also no longer be
subject to a quota system. Last but not least, beet must hold
its ground over the long term against competing crops in the
field and also compete with a potential rise in imports of cane
sugar. However, not only does the end of the sugar market
regime bring new tasks, it also brings new opportunities. The
lifting of the WTO limit on sugar exports means that we will
be able to benefit much more from the export market – provided
of course that we do well and prices allow for this. It is
also certain that there will be another wave of consolidation
in the EU. And Nordzucker will be actively involved in this.
We will be able to master successfully the discontinuation
of familiar regime instruments and the transition to a new world
of sugar with passion and courage in the right places – I am
sure of this! The important thing is to stand together with our
farmers. And to have policies that live up to their responsibility
to create new, sensible framework conditions.
Akzente July 2013 11