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European Sugar Refineries Association Member States Reception 25 th July 2012

European Sugar Refineries Association Member States Reception 25 th July 2012. Agenda. Introduction Issues Myths Solutions. Sugar Refiners i n Europe. ESRA was formed in February 2011 With 26 refineries , it comprises the large majority of the refining capacity

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European Sugar Refineries Association Member States Reception 25 th July 2012

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  1. European Sugar Refineries Association • Member States Reception • 25th July 2012

  2. Agenda • Introduction • Issues • Myths • Solutions

  3. Sugar Refiners in Europe • ESRA was formed in February 2011 • With 26 refineries, it comprises the large majority of the refining capacity • Represents about 4500 employees with about 2400 customers • ESRA is the common voice for cane refiners with regulatory authorities in Europe Finsugar Tate & Lyle Sugars Agrana Lemarco Saint Louis Sucre Sidul DAI RAR Litex Zaharni EAD ZaharenKombinat Plovdiv Azucarera Tereos SFIR

  4. Why Europe Needs Cane Refiners • Europe’s cane refiners… • Bring choice to consumers • Contribute to competition • Aid food security by having a different raw material and processing model • Helps deliver EU Development policy by being a stable and long-term buyer of cane sugar • Provide an important link to the global markets • Local industries provide thousands of high quality manufacturing jobs Two of the 26 cane sugar refineries in Europe

  5. Current situation - Challenges Refiners face major challenges to manage their business not because they aren't competitive • or cost efficient but because they don’t have fair access to raw materialat competitive prices

  6. Fair Access to Raw Material - Our Key Issue • EU Commission forecast preferential imports would double from 2006 levels to 3.5 million tonnes • EU refining capacity has been developed on Commission’s forecasts • Current sugar market based on this balance • There is structural sugar supply deficit in the EU market • This needs to be solved to ensure fair terms of competition • Otherwise it is will lead to the destruction of the majority of cane refineries in the EU

  7. Lack of raw material - Consequences 1 5 2 4 3 Refiners not operating at economically viable levels Distorts competition Over 4,500 jobs threatened Impact on suppliers and customers White sugar prices raised 50% in 18 months (Dec-May)

  8. Unbalanced solutions – Evolution 684 370 • Despite exceptional measures needed because insufficient raw sugar imports • More out-of-quota sugar released than alternative raw cane imports allowed • In 2011/12 the situation was even more unbalanced : 684 vs 370 thousand tonnes WSE • Imports of whites effectively delocalising EU jobs outside

  9. Issues Until 2015 • European Commission should allow the 3.5 million tonnes of duty free cane sugar they forecast would arrive • If it cannot come from EPA and EBA countries then it should be allowed from other suppliers • The current mix of solutions is unfair • Average fee of €53 for beets • Auction costing €183 for cane • It will kill cane refineries who face • Cost of running at 60% capacity • Unfair cost of tax and new supply

  10. Low Imports – Need for measures • 1.8mt of EPA/EBA imports forecast in 11/12 may be too optimistic • Only 1.38mt of licenses applications have been made until 13/07/2012  only 3 months left!! • “Exceptional” measures needed AGAIN because of the structural shortage of imports

  11. Myths – 4 million imported in 2010/11 • In 2010-11 out of 4 million tonnes of imports, 2 million tonnes came as white, refined sugar or sugar within processed products • Refiners could only use about 2 million tonnes, much less than forecasted

  12. Myths – Raws alternative markets • ISO data clearly shows that cane sugar exports from EPA/EBA countries to all markets have actually fallen since 2005. • Due to structural reasons EPA/EBA exports to the EU have simply not risen.

  13. Issues Post 2015

  14. What do Refiners Want? Quotas abolished  Parallel reduction of duties and limits on raw imports Access to raw materials Quotas maintained  Market share of 3.5 mt of raw sugar for refiners Fair terms of competition No favourable treatment

  15. We count on you for… • Until 2015 at the Management Committee: • Ensure sufficient measures are taken early and • in a balanced way • Post 2015 At the Council: • Shape a new CMO that ensures a level playing field to all sweetener producers in the EU

  16. Thank you for your time and attention! • Member States Reception • 25th July 2012

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