D 2.1.1 Note on literature review concerning market ... - Biorefinery

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Biopol - Deliverable <strong>2.1.1</strong> Figure 20: Number of sugar refinery companies and factories within the EU in the year 2005/06 Number 50 40 30 20 10 0 Austria Belgium/ Luxembourg Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Netherlands Poland Portugal Slovakia Slowenia Spain Sweden United Kingdom Number of sugar and refinery companies Number of factories Source: Comité Européen des fabricants de sucre (CEFS) 2007 When taking into account that only very few companies/factories exist in other European countries (outside Poland, France and Germany), it becomes clear that the sugar industry is relatively highly concentrated. Additionally, the degree of integration with the upstream sector is high. This fact can be explained by institutional, technical and economic factors. Sugar beet cannot be transported over long distances, because of technical and economic reasons. So the processing industry is always located close to growing areas of sugar beet. On the downstream side some forms of integration have developed, too. But these are not as strong as with the sugar growers (European Commission 2003). In the EU sugar sector more than 48,000 people were directly employed during the beet processing campaign 2005/06. The campaign lasts on average 90 days because of the perishable nature of sugar beet. Between the beet processing campaign about 30,000 of people worked in the same year in the sugar industry. The number of employees – during and between the campaigns - decreased over the previous years as well. Market introduction and development of biorefinery concepts and related products 32
Biopol - Deliverable <strong>2.1.1</strong> Market volume and production Figure 21 gives an overview over the sugar supply and the growing area of sugar beet in the EU in the years 2004 to 2007. Figure 21: Sugar supply in the EU in the years 2000 to 2007 Growing area [1.000 ha]/ Quantity [1.000 t] 25000 20000 15000 10000 5000 0 00/01 01/ 02 02/03 03/04 04/05 05/06 06/07 Growing area [1.000 ha] Production [1.000 t] Consumption [1.000 t] Import [1.000 t] Export [1.000 t] Source: cited in Sommer 2007 The growing area of sugar beet amounted to 1.7 million hectare (ha) in the EU in the year 2006/07. Absolutely it decreased compared to the previous years as a consequence of the modification of the market organisation. But in the whole the reaction on the adopted market organisation, which was the basis of the cultivation plan for 2006/07, was less significant than expected. Only Ireland, Italy and Greece reduced the acreage significantly more than in the European average. Absolutely the reduction of acreage in France and Germany preponderated - besides Italy. The production of sugar amounted to 15.8 million tons in the year 2006/07. The most important producers within the EU are France (23 %), Germany (21 %) and Poland (11 %). The production dropped rapidly from the year 2005/06 to the year 2006/07. Especially France and Germany, the two biggest sugar producers within the EU, significantly reduced their production (Sommer 2007). The reduction is on the one hand a reaction on the stop of exports (the EU is only allowed to export a maximum of 1.375 million tons per year since 2006/07) and on the other hand a consequence of the increasing duty-free imports of the sugar produced in the least developed countries (Zuckerwirtschaft 2007; Sommer 2007). The increase of the imports and the enormous decrease of exports can be noticed in figure 21 as well. While in the year 2005/06 almost 9 million tons of sugar was exported, it was less than 3 million tons in the year 2006/07. In contrast to the production the consumption of sugar within the EU increased over the last years. It amounted to 19.3 million tons in the year 2006/07. From the beginning of the year 2006/07 the EU is allowed to export a maximum of 1.3 million tons sugar per year. Because of this the further developments on the sugar market will depend - besides harvest variations caused by the weather - on the developments in Brazil, who is the biggest producer of sugar cane worldwide (Sommer 2007). Brazil features the lowest production costs for sugar cane and has a high expansion potential. A big part of its sugar cane production is used for the production of ethanol for the fuels sector. If the world market price for sugar increases significantly, it is possible for Brazil to reduce the ethanol production from sugar cane in the short term and increase the sugar export. On the other hand it is possible that sugar cane is temporarily used in the ethanol sector and not in the sugar sector if the crude oil prices increase very much (Isermeyer et al. 2005). As Brazil is the biggest producer of sugar cane worldwide, its activities affect the world market price for sugar significantly. Market introduction and development of biorefinery concepts and related products 33
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