European Sugar Refineries Association
Member States Reception
25th July 2012
Agenda
 Introduction
 Issues
 Myths
 Solutions
2
Sugar Refiners in Europe

ESRA was formed in February
2011

With 26 refineries, it comprises
the large majority of the refining
capacity


Finsugar
Represents about 4500
employees with about 2400
customers
Tate & Lyle Sugars
ESRA is the common voice for
cane refiners with regulatory
authorities in Europe
Agrana
Lemarco
Saint Louis Sucre
Sidul
DAI
RAR
Azucarera
Tereos
SFIR
Litex
Zaharni EAD
Zaharen Kombinat Plovdiv
3
Why Europe Needs Cane Refiners
Europe’s cane refiners…

Bring choice to consumers

Contribute to competition

Aid food security by having a different
raw material and processing model

Helps deliver EU Development policy
by being a stable and long-term buyer
of cane sugar

Provide an important link to the global
markets

Local industries provide thousands of
high quality manufacturing jobs
Two of the 26 cane sugar refineries in Europe
4
Current situation - Challenges
Refiners face
major challenges
to manage their
business
not because they
aren't competitive
or cost efficient
but because they
don’t have fair
access to raw
material at
competitive prices
5
Fair Access to Raw Material - Our Key Issue
Imports from EPA/EBA


EU Commission forecast preferential
imports would double from 2006
levels to 3.5 million tonnes
Actuals / Latest
3.5
EU refining capacity has been
developed on Commission’s forecasts
Current sugar market based on this
balance

There is structural sugar supply deficit
in the EU market

This needs to be solved to ensure fair
terms of competition

EU 2006 Council Agreement
4.0
3.0
Million tonnes

2.5
2.0
1.5
Otherwise it is will lead to the
destruction of the majority of cane
refineries in the EU
1.0
0.5
0.0
2009/10
2010/11
2011/12
2012/13
6
Lack of raw material - Consequences
1
5
2
Refiners not
operating at
economically
viable levels
4
Distorts
competition
3
Over 4,500 jobs
threatened
White sugar prices
raised 50% in 18
months (Dec-May)
Impact on
suppliers and
customers
7
Unbalanced solutions – Evolution
Exceptional measures - Evolution
0.7
684
Milltion Tonnes WSE
0.6
0.5
0.4
370
2010-11
0.3
2011-12
0.2
0.1
0
Beet
Isoglucose
Raw cane
imports
White imports

Despite exceptional measures needed because insufficient raw sugar imports

More out-of-quota sugar released than alternative raw cane imports allowed

In 2011/12 the situation was even more unbalanced : 684 vs 370 thousand tonnes WSE

Imports of whites effectively delocalising EU jobs outside
8
Issues Until 2015


European Commission should allow the
3.5 million tonnes of duty free cane
sugar they forecast would arrive
If it cannot come from EPA and EBA
countries then it should be allowed
from other suppliers
Average Cost per tonne
2010/11 & 2011/12
200
180
160
140
120

The current mix of solutions is unfair

Average fee of €53 for beets

Auction costing €183 for cane
100
80
60

It will kill cane refineries who face

Cost of running at 60% capacity

Unfair cost of tax and new supply
40
20
0
Beet & isoglucose
Raw sugar for refining
9
Low Imports – Need for measures
EPA/EBA Imports - 2011/12
3500
Thousand Tonnes WSE
3000
2500
2000
1500
◄ 13 July
1000
500
0
Imports
Latest EU Forecasts
2006 Forecast

1.8mt of EPA/EBA imports forecast in 11/12 may be too optimistic

Only 1.38mt of licenses applications have been made until 13/07/2012  only 3 months left!!

“Exceptional” measures needed AGAIN because of the structural shortage of imports
10
Myths – 4 million imported in 2010/11
Total sugar Imports in 2010/2011
4.5
4
Million tonnes
3.5
Others
3
Balkans
2.5
Import tender
Exceptional TRQ
2
Processed Products
1.5
CXL
EPA/EBA
1
0.5
0
Total
For refiners - total

In 2010-11 out of 4 million tonnes of imports, 2 million tonnes came as white, refined
sugar or sugar within processed products

Refiners could only use about 2 million tonnes, much less than forecasted
11
Myths – Raws alternative markets
ACP/LDC exports to ALL countries vs world prices
World price sugar $/t
ACP/LDC worldwide export volumes
World Sugar Prices
2,900
600
2,800
500
2,700
400
2,600
300
2,500
200
2,400
100
2,300
0
2005
Exported Tonnes '000
2006
2007
2008
2009
2010
Year

ISO data clearly shows that cane sugar exports from EPA/EBA countries to all markets
have actually fallen since 2005.

Due to structural reasons EPA/EBA exports to the EU have simply not risen.
12
Issues Post 2015
Beet sugar
Isoglucose
Cane refiners
Freedom to buy
unlimited raw
material at
market prices
Freedom to sell
unlimited end
product
13
What do Refiners Want?
Access to
Quotas abolished

Parallel reduction
of duties and limits
on raw imports
raw materials
Fair terms of
competition
No favourable
treatment
Quotas maintained

Market share of
3.5 mt of raw sugar
for refiners
14
We count on you for…
 Until 2015 at the Management Committee:
Ensure sufficient measures are taken early and
in a balanced way
 Post 2015 At the Council:
Shape a new CMO that ensures a level playing
field to all sweetener producers in the EU
15
Thank you for your time and attention!
Member States Reception
25th July 2012