European Sugar Cut Approved

BRUSSELS - Mar 6/06 - SNS -- European Union member countries approved the new sugar production regime, which will force them to cut sugar, isoglucose and inulin syrup production 2.5 million metric tons (MT) in 2006-07.

Officials said 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 first marketing year under the reformed sugar regime could be very difficult because of possible oversupply of the market, due to limited export possibilities and the fact that in this first year, the effects of the Restructuring Fund will not yet be felt," officials said in a press statement.

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