Caobisco and Cius groups call for EU and Mercosur deal enabling key sugar exports
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Caobisco European confectionery trade organisation, and Cius, the region’s sugar users association, have urged the EU and South American Mercosur countries to urgently conclude a free trade agreement enabling 180,000 tonnes of raw sugar to be exported to Europe, reports Neill Barston.
The two key industry groups stated that the negotiations between the trading blocs this month represented a ‘historic opportunity’ to help deliver greater supply chain security, and resolve a significant challenge for the sector, which market observers have noted, is struggling to meet heightened levels of global consumer demand.
Significantly, as Confectionery Production has reported, recent studies have projected that the wider sector could grow to an international value of $438 billion by 2032 on its present track of growth, despite a complex backdrop of trading challenges including rising energy costs, and inflation of key ingredients prices, including sugar, as well as wheat, which are continuing to be negatively impacted by the ongoing war in Ukraine causing significant trading uncertainty.
As Cius and Caobisco (which is set to play a notable role in our World Confectionery Conference on 5 October, with a keynote from vice president Barbara Blohberger), noted, for European sugar users, the potential trade deal would create access for 180,000 tonnes of South American raw sugar to have free access to EU markets, with potential for far greater levels- which the two sector organisations believe should be upgraded further, to relieve pressure on its markets.
Notably, the two stated that more significant imported quantities of sugar would ensure sustainable supplies to the European sugar users of which more than 99% are SMEs and avoid economic consequences such as job losses, as experienced in the last six years due to a repetitive sugar deficit. There is no longer a justification to treat sugar as a sensitive product in FTA negotiations, as the EU has become a net importing region and needs to guarantee sufficient sustainable supplies from imports.
Furthermore, the combined organisations added that they had three specific requests to the EU – firstly to increase market access for raw and white sugar imports from Mercosur countries and to extend the deal with the bloc – which presently include Argentina, Brazil, Paraguay and Uruguay, with a reported combined gross domestic product of $2.2 trillion, according to World Bank figures. In the groups’ view, sugar imports of sufficient quality and respecting origin rules should be facilitated so as to give access to sugar for the users of the food and drink sector in case of a deficit situation on the EU sugar market.
In addition, Caobisco and Cius added that the EU Commission should also consider alternative options to supply sugar to the European sugar users, as the current context and the existing access routes are not sufficient. It is fundamental for our sector to have access to alternative duty-free sources for sugars to ensure continued production of high value-added sugar containing products in Europe and remain competitive on the world market.
Finally, the two organisations felt that there should also be re-evaluation of elements of previous trade agreements with the wider South American and Latin American region, notably in regards to Cuba, which the bodies’ noted had its own short-term shortages in sugar availability, meaning it did not contribute to exports. Therefore, the group believed the country’s allocations may be better placed with other members in order to bring balance to wider markets.
