Operating in a diverse and continually changing environment presents many opportunities and challenges. The final round of changes to the European Union (EU) sugar regime in 2017 is just one example. These changes are abolishing production quotas, removing minimum beet prices and eliminating the artificial distinction between sugar sold for food and industrial applications in the EU.
Such a dynamic market is increasing the pressure on the competitiveness of the total EU sugar supply chain. Farmers, processors, haulage companies and other key stakeholders will all need to ensure their individual competitiveness, so that the sugar industry can continue competing as a whole.
In short, we are expecting the EU sugar market to become more volatile. We should note, however, that World Trade Organisation-governed import duties for non-preferential sugars into the EU will remain in place. Sugar companies will be free to increase production and starch producers will be able to increase production of caloric sweeteners, further increasing EU supplies. When world market prices are high, EU sugar can be exported and when low, supply will exceed demand. As a consequence, sugar prices in the EU will be moving more in line with world prices.
The UK European Referendum vote is introducing a further dimension to the 2017 EU sugar reform for sugar producers in the EU. Brexit offers opportunities for great British businesses and industries, such as British Sugar and the wider UK beet sugar industry.
The homegrown beet sugar industry is important for our agricultural sector, supporting thousands of jobs and farming businesses. For the first time we have quantified the extend of this ripple-down effect in our new report 'British Sugar: A Homegrown Success Story', which you can read here
Our UK beet sugar industry is critical to rural and agricultural economy. No beet sugar grower just grows beet; it is a valuable rotation crop and has no direct support for the EU or UK Government. Sugar yields have improved by more than 25% over the past 10 years. Britain has higher yields than Brazil and most EU countries. Key analysis on the contribution of the UK beet sugar industry can be viewed here