Sugar prices look set to rocket in the 10 mostly central and east European countries set to join the EU in two weeks' time as they adapt to the bloc's protectionist regime, a leading industry group said on Thursday.
After these states become fully-fledged club members on May 1, their sugar markets will have to fall into line with EU policy: a subsidy-laden system that guarantees high prices at levels that are more than three times the world market.
CAOBISCO, the Association of the Chocolate, Biscuit and Confectionery Industries of the EU, forecast that sugar prices would rise by up to 60 percent in the accession countries.
"The EU sugar market regime is especially detrimental to the European consumer and the sugar-processing food industry due to artificially high sugar prices arising from governmentally fixed prices and production quotas which are protected by high import duties," said CAOBISCO's Secretary General David Zimmer.
"But the accession countries are required to make the transition to the EU sugar regime structure," he said in a statement. "This does not give a good signal to the New Member States of the EU."
The European Commission, concerned about unscrupulous speculators in the new states hoarding sugar ahead of the May 1 accession date and then selling it a huge profit afterwards, is on the alert for suspiciously high stocks in the 10 states.
It has passed laws that would slap hefty fines on the newcomers' governments if it finds cases of illegal speculation.
Zimmer blasted these arrangements as a "bureaucratic nightmare" and said they caused unnecessary pressure on industrial users of sugar. EU sugar producers have also said the stock monitoring rules will disrupt their long-term planning.
"It is clear that the transitional arrangements will cause, and are already responsible for, confusion and disproportionate pressure on companies which use sugar, market sugar, including sugar contained in finished products," Zimmer said.
EU agriculture ministers are now discussing reform of the bloc's sugar regime, barely altered since its launch in the late 1960s. Three options are on the table, which include cuts to minimum prices and abolition of national production quotas.
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