European Union sugar experts have agreed to reduce production quotas by 1.806 million tonnes for the 2005/06 marketing year, officials said on Thursday. "It was (a cut of) 1.892 million tonnes for everything. Out of that, sugar is 1.806 million tonnes...and roughly 52,000 tonnes is isoglucose and 32,000 for inulin," one official told Reuters.
Sugar production quotas qualify for generous EU subsidies and are allocated to all beet-growing member states each year. Those volumes are usually cut each September to ensure that the next year's exports remain within agreed world trade limits.
A large quota cut was expected this year since the experts failed to implement any reduction in 2004/05 quotas.
Europe also has an oversupply of sugar due to ample domestic output, the inflow of some 840,000 tonnes of sugar into intervention stores, as well as speculative stockpiling in the EU's 10 newest countries before their accession last year.
The figures agreed by the EU's sugar management committee, comprising officials from national sugar authorities and the European Commission, are lower than last week's working numbers - a cut of 1.976 million tonnes for sugar, 57,508 tonnes for isoglucose and 36,330 tonnes for inulin syrup.
But the Commission will face problems next week with its quota cut since the reduction effectively releases this amount of sugar onto world markets - angering the three countries that have won a world trade panel against Europe on unfair subsidies.
Australia, Thailand and Brazil have requested a debate on the EU's sugar quota cut, known as "declassification", on September 27 at the World Trade Organisation's dispute settlement body.
The EU says the time allowed to comply with the WTO ruling, where it must abide by new export curbs, will dovetail with the start of its planned sugar reform in July 2006. It wants to keep its current system in place until then.
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