EU sugar export tenders not excluded as stocks rise

The European Union may have to open subsidised export tenders later this year to reduce its growing sugar stockpile should its strategy of domestic resale tenders fail to work, officials and analysts said on Wednesday.
This month three tenders were opened to sell some 247,000 tonnes of white and raw sugar back into the internal market, as EU law stipulates that sugar taken into intervention storage before March 31 must be sold before October 1 of the same year.
Officials at the European Commission, the EU executive, have so far dismissed the idea of intervention exports, saying they prefer to open more resale tenders depending on how the first three progress. But analysts say the possibility cannot be ruled out.
"The idea is to follow the internal market rules and then later they could go to the world market," said one Brussels-based analyst. "It's the standard Commission practice of flying a kite first and then seeing what happens."
Latest figures show stocks of 703,552 tonnes held in eight countries as of August 19, with a further 12,000 tonnes offered.
Intervention is a long-established system for supporting farmers where the EU will buy up crops at a minimum price. In February, it was used for sugar for the first time since 1986.
With exporter revenues below the EU intervention price for white sugar - frozen for several years at 632 euros per tonne - and with the dollar's weakness against the euro, it is not unreasonable to use the intervention system, producers say.
Speculation has been rife for months about how the Commission will handle stocks and the issue has been hanging over Europe's sugar market, along with how the looming reform of the 37-year-old EU sugar regime will play out.
A lot will depend on how much next year's national sugar production quotas will be cut, a decision usually taken in September to balance the EU's sugar supply, demand and maximum amount of subsidised exports permitted under world trade rules.
Under World Trade Organisation rules, the EU may only export 1.273 million tonnes of subsidised sugar a year at a maximum value of 499 million euros. Both ceilings must be respected.