2205 final report.pdf - Agra CEAS Consulting

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IMPACT OF THE EU SUGAR REGIME ON BCCCA MEMBER COMPANIES Using the available CAOBISCO price series (Table 3.1), the data has been analysed and the results are presented in Figure 3.2 and Table 3.2. Despite the limitations of this data 11 , this analysis reveals that: • Ex-factory delivered price for sugar for industrial use varies considerably between Member State. Over the period, there was a 17.7% difference between the highest and lowest average sugar price within the Member States with Denmark having the lowest average price at €71.17 per 100kg and the UK having the highest price at €83.73 per 100kg. • Ex-factory delivered price for sugar for industrial use has generally remained relatively stable over time. The main exception is the UK where prices fluctuated by up to 7.38% below and 14.17% above the average of €83.73 per 100kg between 1995 and 2002 12 . In summary, the analysis has demonstrated that the UK ex-factory delivered price for sugar for use in the production of chocolate, biscuits and confectionery is higher (and more volatile) than in any other Member State. From a market clearing perspective, this finding is difficult to explain, particularly given that there seems to be no correlation between the CAOBISCO prices for industrial sugar and the supply and demand situation in each Member State. For example, although prices tend to be relatively high in Spain, Sweden and Portugal where sugar is typically in deficit, prices are also relatively high in France and the UK 13 where sugar is typically in surplus. In contrast, prices are relatively low in Greece where sugar tends to be in deficit (Figure 3.2). 11 The CAOBISCO ad-hoc survey of ex-factory delivered prices for sugar for industrial use is an unofficial price series and has its limitations; it is not clear whether or not the CAOBISCO list is based on a representative sample of industrial sugar users. It should also be noted that the series is neither complete nor does it have price information for the same periods for each year. According to the sugar processing industry, as reported by NEI in its 2000 report to the European Commission (Evaluation of the Common Organisation of the Markets in the Sugar Sector), the prices collected by CAOBISCO cannot be considered as representative of the average industrial user price in the Member States concerned, which they believe are much lower. 12 Although the extent of this fluctuation changes according to the time period selected for analysis. 13 Although demand for sugar in the UK exceeds that supplied from UK beet production, imports of cane sugar into the UK under the ACP Protocol/Agreement means that sugar is effectively in surplus in the UK. 14
IMPACT OF THE EU SUGAR REGIME ON BCCCA MEMBER COMPANIES 120.00 100.00 Ex-factory delivered price (€ per 100kg) 80.00 60.00 40.00 20.00 0.00 Austria Germany Denmark Spain France Greece Italy Ireland Netherlands UK Sweden Portugal Surplus in white sugar production Deficit in white sugar production Figure 3.2: Average and, deviation from the average, sugar price for industrial users, 1995-2002 Source: CAOBISCO Table 3.2: Analysis of ex-factory delivered prices for sugar for industrial use, 1995-2002 (€ per 100kg) Average price Minimum price over period Deviation in minimum price from average Maximum price over period Deviation in maximum price from average (€ per 100kg) (€ per 100kg) (€ per 100kg) (%) (€ per 100kg) (€ per 100kg) (%) Austria 73.40 72.67 0.73 0.99% 74.13 0.73 0.99% Germany 71.76 70.30 1.46 2.04% 73.37 1.61 2.24% Denmark 71.17 70.29 0.88 1.23% 72.63 1.46 2.06% Spain 77.51 77.00 0.51 0.65% 78.13 0.62 0.81% France 77.26 74.83 2.43 3.15% 77.96 0.70 0.90% Greece 71.88 69.85 2.03 2.82% 73.51 1.63 2.27% Italy 73.78 72.30 1.48 2.01% 74.89 1.11 1.50% Ireland 76.21 75.17 1.04 1.37% 78.72 2.51 3.29% Netherlands 72.95 69.88 3.07 4.21% 74.11 1.16 1.59% UK 83.73 77.55 6.18 7.38% 95.60 11.87 14.17% Sweden 75.55 73.04 2.51 3.32% 80.07 4.52 5.98% Portugal 77.81 74.82 2.99 3.84% 79.56 1.75 2.25% Source: Agra CEAS calculations based on CAOBISCO data From an economic perspective, in a competitive environment theory suggests that prevailing market prices would not be (much) higher than the minimum guaranteed price plus the costs of additional 15
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2205 final report.pdf - Agra CEAS Consulting

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