India, Pakistan and the European Union have been called on to end practices which distort the world sugar market.
The Global Sugar Alliance said Pakistani and Indian governments needed to reconsider their use of artificial support mechanisms to export sugar.
Global Sugar Alliance Secretary and CANEGROWERS head of economics, Warren Males, said both countries needed to comply with their international commitments undertaken in the World Trade Organisation and not export subsidised sugar.
“Fuelled by a glut of government supported sugar originating from Pakistan, and the threat of subsidised Indian sugar exports, the world sugar (ICE #11) has dropped 20 per cent so far in 2018,” Mr Males said.
“The level has not seen since the EU sugar export subsidy program was brought into alignment with its WTO obligations a decade ago.
“Subsidised Pakistani sugar is already flowing onto the world market and significant volumes of subsidised Indian exports are expected to commence soon.
“This has driven the market to unsustainable levels, well below the costs of production for even the most efficient global raw sugar and sugarcane producers.”
Subsidised sugar has driven the market to unsustainable levels, well below the costs of production for even the most efficient global raw sugar and sugarcane producers.
Global Sugar Alliance members are seeking a serious commitment from India and Pakistan to a major reform agenda over the medium to long term.
“Market distortions must cease; the government assistance provided to sugarcane and sugar productions sectors is detrimentally affecting the long-term viability and resilience of the domestic sugar industries in these countries,” Mr Males said.
The Global Sugar Alliance is also calling on the European Union to abide with its WTO commitments and eliminate the adverse effects of substantial sugar over-production and exports caused by its subsidy programs.
EU sugar market reforms have failed to eliminate surplus sugar production that is being sustained by subsidies and protected by high import tariffs. This surplus is approaching the level that existed prior to the reforms. It is displacing imports of sugar into the EU market and, through substantially increased exports, depressing the world white premium, he said.
UNICA executive director Eduardo de Sousa said there must be no exports of the subsidised sugar.
“Global Sugar Alliance members will be closely monitoring developments and encouraging our governments to take all necessary steps to ensure compliance with WTO rules,” Mr de Sousa.
The degree to which current and proposed domestic support programs and export subsidies contravene WTO rules is currently a focus for trade lawyers.
Thai Sugar Millers Corporation chairman Vibul Panitvong said the sugar market had long been plagued by distortive government interference.
“In the spirit of the decision taken at the Nairobi WTO Ministerial meeting to end export subsidies, Global Sugar Alliance members called on the Pakistani and Indian Prime Ministers to commitment unequivocally to the elimination of trade distorting government assistance,” Mr Panitvong said.
Canadian Sugar Institute president Sandra Marsden said improved trading conditions are in everyone’s interests.
“Trade distorting subsidies must not be allowed to prevail,” she said.