Microsoft PowerPoint - Summary of New EU Sugar Regime 25.11.2005.ppt by vmarcelo

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									Summary of EU Sugar Regime
Agreement




                       EU Sugar Regime
                          2006-2015
                                     24th November 2005




                                Executive Summary of
                                 New Sugar Regime

                No fundamental change to Proposal of June 22nd 2005.
                Main compromises were in, the level of overall price cut, 36% instead of 39%, the
                implementation period, 4 years instead of 2 and the level of compensation and
                aid offered to growers and processors.
                No compulsory quota cuts.
                Limited intervention scheme retained to 2010.
                New regime will run from 1st July 2006 until 30th September 2015.
                No change to EBA/LDC arrangements.
                Internal market reference prices remain unchanged until 1st October 2008.
                There will be no review of the price and quota levels in 2008.
                Year 1 of the new sugar regime will run from 1st July 2006 to 30th September
                2007, thereafter the start date of the sugar campaign and the marketing year will
                be 1st October.                                                                     2




Tony Evans                                                                                              1
Summary of EU Sugar Regime
Agreement




                                      Possible Reform
                                         Timetable
                 2005 – November 24th: EU agreement on Sugar Reform
                 2006 - January 17th: EU Parliament vote on sugar reform.
                 2006 - Late January/February: Final Council text.
                 2006 - Late February/March 2006: Final Council vote.
                 2006 - March – June 2006: Implementation/transitional regulations agreed in
                 Management Committee meetings.
                 July 1st 2006: Implementation – effective until 30th September 2015
                 July 1st 2006: End of current regime, start of EBA duty cuts
                 2007 - Anticipated date for Bulgaria and Romania to join
                 2008 - Possible start of new WTO agreement
                 2008 - Last year of quota restrictions for EBA imports
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                 2009 - EBA imports all duty free




                                    Beet Production &
                                      Intervention

                Additional Quota of 1.1million tonnes available for one off charge of €730 per
                tonne up until 30th September 2007. UK share remains at approx 83,000
                tonnes.
                No compulsory quota cuts - annual quota reductions are possible to manage
                market. Carry-over for surplus production will be allowed – following years
                quota adjusted accordingly. A superlevy to be charged on any excess not
                carried, exported or used for industrial non food purposes (chemical industry).
                A production charge to be introduced from 2007/08, at rate of €12/t sugar
                quota (50% for isoglucose), to pay for export and production refunds and the
                private storage scheme.
                Intervention will be retained for the period 2006-10 for maximum 600,000
                tonnes per annum. Intervention price will be 80% of the reference price of the
                following year.
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Tony Evans                                                                                            2
Summary of EU Sugar Regime
Agreement




                                   Compensation & Aid


                Compensation for beet growers is raised from 60% to 64.2%.
                Additional funds have been made available for deficit areas (Finland, Ireland,
                Portugal, Spain and UK). 60% of the deficit area premium currently paid (UK =
                60% of €14.60 per tonne).
                In member states where farmers give up more than 50% of their production,
                additional compensation up to 100% is allowed for maximum of 5 years.
                Preferential imports of raw cane will continue to go to “traditional refiners only
                until 2009/10.




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                                    Restructuring Fund



                To be applied over 4 years 2006/07 to 2009/10
                To be funded by a levy on all sweetener quota production over 3 years
                2006/07 to 2008/09
                Transitional aid of €150million will go to help full time raw cane refiners subject
                to a suitable business plan.




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Tony Evans                                                                                                3
Summary of EU Sugar Regime
Agreement




                                                        Reference Price


                     The intervention price will be replaced by a reference price that will be set at a
                     level 36% lower than the current intervention price.
                     The price decrease will be achieved within four years, beginning in the 2006/07
                     campaign.
                     The reference price will serve as the trigger level for private storage.
                     Internal market reference price will remain unchanged until 1st October 2008
                     Minimum raw cane price will also remain unchanged until 1st October 2008




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                                               Proposed Institutional
                                                      Prices

                                     €/tonne                        2005-06   2006-07   2007-08   2008-09   2009-10   2010-11


             EU Reference Price                                     631.90    631.90    631.90    524.00    404.40    404.40

             EU Minimum Beet Price                                   43.63     32.86     29.80     26.70     26.30     26.30

             Guaranteed ACP/LDC Raw Sugar Price                     523.70    496.80    496.80    434.10    335.00    335.00

             Producers Restructuring Charge                                   126.40    173.80    113.30
             EU Reference Price Net of Restructuring Charge         631.90    505.50    458.10    410.70    404.40    404.40


             Restructuring Payment to exit production                         730.00    730.00    625.00    520.00

             Anticipated reduction in production (million tonnes)              3.48      4.48      5.42      6.28




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Tony Evans                                                                                                                      4
Summary of EU Sugar Regime
Agreement




                                             Possible EU Production &
                                                  Import Levels
                                                                                   2005-06   2006-07   2007-08   2008-09   2009-10   2010-11


               EU-25 Sugar Production Estimates                                     18.7      15.3      14.7      13.7      12.9      12.9
               Carried-over from previous year                                       0.7       0.7       0.7       0.7       0.7       0.7
               EU-25 Sugar quota                                                    15.5      15.1      14.0      13.0      12.2      12.2
               EU-25 C Sugar                                                        3.2       0.2       0.7       0.7       0.7       0.7
               EU-25 Imports                                                         1.9       1.9       2.2       2.3       3.1       3.1

               TOTAL SUGAR QUOTA AVAILABILITY EU-25                                 19.6      17.7      16.9      16.0      16.0      16.0

               Exports (Subsidised)                                                  2.8       1.3       1.3       0.0       0.0       0.0

               Consumption                                                          15.6      15.6      15.6      16.0      16.0      16.0

                                                                Balance              4.4       1.0       0.7       0.7       0.7       0.7
                                                             carryover?              0.7       0.7       0.7       0.7       0.7       0.7
                                                  unsubsidised exports?              3.7       0.3       0.0       0.0       0.0       0.0
               EU-25 Imports
                                                             ACP (Protocol)          1.3       1.3       1.3       1.3       1.3       1.3
                                                     ACP (SPS for refining only)     0.1       0.1       0.1       0.1       0.1       0.0
                                                                         LDC         0.1       0.1       0.4       0.5       1.4       1.5
                                                                         MFN         0.1       0.1       0.1       0.1       0.1       0.1
                                                                BALKANS              0.3       0.3       0.3       0.3       0.3       0.3
                                                                                     1.9       1.9       2.2       2.3       3.1       3.1     9
               Source: EU Commission and NBF estimates




                                      International Commitments


                  LDC zero-tariff imports, under the “Everything But Arms” (EBA) initiative as
                  from 2009/10, are not renegotiable. These countries should benefit from the
                  same guaranteed prices as those provided in the ACP sugar protocol.
                  To ensure that EBA imports are not misused by shipping sugar of non-LDC
                  origin a specific safeguard clause will be triggered if annual imports suddenly
                  jump by more than 25%.
                  As EU sugar refiners are not part of the restructuring scheme, the minimum
                  guaranteed import price will move in line with the EU institutional price and
                  preferential sugar suppliers will benefit from a delay in the cut of their
                  preferential raw sugar price compared to EU producer prices.


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Tony Evans                                                                                                                                          5

								
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