Europe needs more sugar; Brazil grows as potential supplier

Europe is currently facing a sugar shortage, and food manufacturers are paying dearly to secure supplies after a heat wave crippled local output this year.

Manufacturers of sweets, cakes, and soft drinks are paying much more than usual to acquire sugar in the short term. As a result, the risk of some going out of business has increased, according to CIUS, the association representing European sugar buyers. For consumers, it is a threat of further inflationary pressure.

The association wants the European Union to suspend import tariffs to encourage shipments of refined sugar temporarily.

To alleviate the crisis, Europe could buy from countries in Africa and the Caribbean, whose shipments have fallen in recent years but which may now have more attractive prices, according to Josh Gartland, deputy director general of Europe’s association of sugar refineries, CEFS.

More shipments from the leading exporters, Brazil and India, would be another option. On the other hand, India has imposed export quotas, and higher ethanol prices have encouraged Brazilian mills to divert more cane to biofuel.

CEFS also fears foreign competition and a drop in local prices for sugar made from crops such as beets in Europe.

Imports could hurt producers’ incomes at a time characterized by rising input costs and threatening future production sustainability.

After a heat-stricken season and dry weather harmed crops, the European Union expects production to fall 7% to 15.5 million tonnes in the current crop year. Planting has decreased by 20% in the last five years, as historically low prices have prompted farmers to shift to more profitable crops such as grains.

“We are deeply concerned that we have entered a long-term deficit situation,” CIUS President Yury Sharanov told a seminar in London. “If adequate measures are not implemented, the same situation could be repeated next season.”

The EU said imports in the third quarter were up year-on-year. European producers are already exporting less to focus on supplying local buyers, says CEFS’s Gartland.

Source: Money Times

To read the full original article, please go to: https://www.moneytimes.com.br/europa-precisa-importar-mais-acucar-e-brasil-pode-ser-opcao/

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