Department urged by food industry to prevent sugar shortages in EU

SUGAR shortages in the European Union will leave Irish food companies facing price increases and ingredient sourcing difficulties this year, according to the food wing of employers’ body IBEC.

Food and Drink Industry Ireland has called on the Department of Agriculture to support the food industry at an upcoming meeting of the European Commission’s sugar management committee, which is planning to issue 350,000 tonnes of sugar export licences.

World market sugar prices reached a 30-year high in November. The group predicts 2011 will be the third year that global production/consumption has been in deficit. The group said its members were having difficulty sourcing sugar and that a larger quantity of sugar needed to be made available within the EU.

FDII director Paul Kelly said: “Most of the sugar consumed in Ireland is produced in the EU, which still operates import tariffs.

“While EU sugar refiners have covered 90% of their requirement, high prices and availability problems now mean there is a shortage of supply.

“In Europe as a whole, there is not enough sugar to cover existing supply contracts and this is beginning to have a major impact on many Irish food and drink companies.

“This problem has been exacerbated by recent indications from the EU that it would be issuing 350,000 tonnes of export licences for sugar.

“This means that a large quantity of sugar will exit the EU, which is particularly unhelpful at a time when sugar supplies are scarce. FDII has called for this sugar not to be exported and instead to be made available to EU consumers. The European Commission’s sugar management committee has postponed a decision on this matter twice in recent months. This uncertainty is not helping the situation.”

Mr Kelly said that this volatility was unlikely to ease until at least next year’s harvest.

Meanwhile, a business and farming consortium, featuring former workers in Greencore’s plant in Mallow among others, have been examining the possibility of reviving Ireland’s sugar industry.

Their proposed new plant would also produce ethanol and green energy to make it more viable.

EU Commission officials confirmed in a recent meeting with farmers that the future of the EU sugar regime will form part of the reform of the CAP, due for completion next year.

The meeting was facilitated by Fine Gael MEP Mairead McGuinness. “The commission was given a very clear message that Irish farmers want to grow sugar beet for sugar production and are angry that the sugar industry was closed down,” she said.