Europe Approves Sugar Cut

BRUSSELS - Mar 3/06 - SNS -- European Union governments today agreed on a Commission proposal for a one-year cut of 2.5 million metric tons (MT) or 13.6% in sugar, isoglucose and inulin syrup production.

This one-off reduction is necessary to ensure that the newly-reformed sugar regime gets underway without heavy surpluses undermining market balance.

The production cut is divided up between the individual Member States according to a balanced weighting of the reduction coefficients traditionally used in the sugar sector and the linear cut laid down in the new Common Market Organisation (CMO) Regulation.

The coefficients reduce production more for those countries which previously had higher "B" quotas: in other words those which produced more sugar for export.

Under the sugar reform, this distinction between "A" and "B" quotas will disappear. In calculating the cut in production for 2006-07, special account will also be taken of those countries which undertake large reductions in quota in the first year of the reform through the newly-introduced Restructuring Fund.