EU sugar plans 'could destroy African producers'

Mozambique’s Minister of Industry and Trade, Antonio Fernando, expressed concern on Saturday that European Union plans to reform its sugar price regime could destroy local producers.

To date, Mozambique, and other former colonies in the African, Caribbean and Pacific (ACP) group, have been allowed to sell sugar on the EU market at a fixed, preferential price, and under a quota system. The reforms currently being pushed by the European Commission would slash the fixed price by 37%.

Fernando said 30 000 jobs in Mozambique are at risk because of the planned changes.

He said he favours liberalisation of the sugar market—but this should be done gradually.

Mozambique’s sugar industry was devastated during the country’s civil war.
Since the late 1990s, massive investments have been made, notably by Mauritian and South African enterprises. Four of the country’s six sugar mills are now functioning, and produce between them more than 200 000 tonnes of sugar a year.

But the investment has not yet been recouped, and there is still a long way to go in improving the efficiency and competitiveness of the Mozambican industry.

“The industry will not become competitive if it is suddenly faced with a drastic cut in the price paid by the EU,” said Fernando.

Currently, ACP countries can sell their sugar on the European market at the price of â,¬632 per metric tonne. This is three times higher than the current, depressed world market price.

If the EU, under pressure from free trade pressures from the World Trade Organisation, and from large-scale cheap producers of sugar such as Brazil, goes ahead with the current plans, the price will fall, over a couple of years, to â,¬398 per metric tonne.

Caribbean producers, who will also be affected, have threatened to take the EU to the International Court of Justice over the planned cuts.—Sapa-AP

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