Report from the Commission to the European Parliament and the Council. Evolution of the sugar imports in the European Union from LDC and ACP countries. Commission report referred to in Article 5 (3) of Commission Regulation (EC) No 828/2009

Article 9 of Council Regulation (EC) No 1528/2007 of 20 December 2007 (the Market Access Regulation) applying the arrangements for products originating in certain states which are part of the African, Caribbean and Pacific (ACP) Group of States provided for in agreements establishing, or leading to the establishment of, Economic Partnership Agreements (EPA) provides that for the period 1 October 2009 to 30 September 2015 imports of sugar from ACP states which are not Least Developed Countries (LDC) may be suspended where simultaneously sugar imports from all ACP's exceed 3.5 million tonnes and imports from ACP non-LDC's exceed 1.6 million tonnes per marketing year. This quantity has been subdivided by region of production which guarantees minimum access for each EPA region. This is called the Transitional Safeguard Mechanism (TSM).

Article 5 and Annex IV of Commission Regulation (EC) No 828/2009 of 10 September 2009 laying down detailed rules of application for the marketing years 2009/2010 to 2014/2015 for the import and refining of sugar products of tariff heading 1701 under preferential agreements, provides further details of the TSM. Article 5 paragraph 3 states that "the Commission shall present a report on the functioning of the transitional safeguard mechanism for sugar". The report shall take account of sugar trade flows from ACP and LDC countries listed in annex I of this Regulation.

In 2006 the European Union reformed its sugar regime in order to increase the competitiveness and market orientation of the EU sugar industry. Key elements of this reform were a gradual 36% cut in the EU support prices for both the EU producers and ACP/LDC preferential exporters and a reduction of the EU quota sugar production. The 2006 sugar reform took into account the preferential access for ACP and LDC sugar producers.

During the reform it was estimated that, on the import side, a major role might be played by "swap" trade flows from preferential partners (ACP/LDC), under the hypothesis of a world white sugar price of USD 200/tonne and an exchange rate of 1.3 USD/€. Under these assumptions, the difference between the EU sugar price and the world price, or the price in the ACP and LDC countries, might encourage some of these countries to export to the EU as much of their domestic production as possible by using swaps.

Swaps depend on the gap between world and EU prices, freight costs and importers capacity to organise this difficult scheme. During the reform it was considered that the potential maximum volume which could be "swapped" was 3.5 million tonnes, which corresponded to the ACP/LDC production capacity.

EUR-Lex: COM(2013)323: Follow the progress of this report through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:323:FIN

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