At the beginning of August the Jamaican government signed an agreement with a Chinese company, China National Complete Plant Import & Export Co Ltd (Complant), for the sale of ‘Jamaica’s three largest plants – Frome, Monymusk and Bernard Lodge’ for US$9 million, a commitment to invest US$127 million, the leasing of ‘approximately 30,000 hectares of cane lands at a rate of US$35 per hectare per annum for 50 years… renewable for an additional 25 years’ and a commitment to conduct a feasibility study for ‘the construction of a sugar refinery and ethanol facility’. The company, an investment arm of the government of the People’s Republic of China, already has construction interests in Jamaica. The three mills which have been loss-making enterprises for more than three decades, will only be taken over at the end of the 2010-11 season, so as to enable the Jamaican government to fulfil a forward-sales agreement with Tate & Lyle for 100,000 tonnes of sugar.

This completes the sale of government-owned sugar plants in Jamaica, following the sale in 2009 of ‘two other state-owned factories, Duckenfield and Long Pond to private local buyers’.

After much speculation in the financial press, Tate & Lyle has sold its sugar division to the US firm American Sugar Refining (ASR) for £211 million. The sale includes the factories and refineries in the UK and Portugal, and ‘a perpetual worldwide licence to use the famous brand names’. Tate & Lyle is now to focus on its food ingredients business, with the revenues from the sale being used to reduce the company’s net debt (which stood at £814 million at the end of March 2010). This follows the sale to ASR of Tate & Lyle’s North American sugar interests in 2001, and its Canadian interests in 2007. Tate & Lyle also plans to sell its remaining sugar businesses (molasses and Vietnamese sugar).

ASR is a global sugar business with a total refining capacity of 6 million tonnes per year. It is based in New York, with facilities in Yonkers, New York; Baltimore, Maryland; Chalmette, Louisiana; Crockett, California; Toronto, Canada; and Veracruz, Mexico. ARS itself is owned jointly by Florida Crystals Corporation, which is part of the Fanjul Corporation and the Sugar Cane Growers’ Cooperative of Belle Glade, Florida: ‘Florida Crystals is the only producer of certified organic sugar grown and harvested in the United States.’

According to press reports, F.O. Licht is forecasting sugar production 0.7% above previous estimates on the back of higher Indian and Brazilian production. This will take production up to 155 million tonnes by the year ending 1 October 2010, from an earlier estimated level of 153.9 million tonnes. Brazilian output is expected to ‘rise significantly in 2010/11’, with the sugar market expected to be back in surplus in 2010-11. Global demand however remains strong despite the economic downturn.

Raw sugar for July delivery meanwhile rose 1.9%, while August deliveries rose 2.8%. This has begun to reverse in part the dramatic price declines, with prices now 44% below the level prevailing in June 2009. It is argued that lower prices may spur fresh demand, supporting the current price improvements. Sugar Knowledge International (SKIL) meanwhile reported raw sugar prices bouncing back to above 17 US cents/lb at the beginning of July 2010.

FranceAgriMer’s council of experts on the sugar industry commented in a press release that there had been a distinct recovery on the world sugar markets since mid May, with demand remaining strong due in part to a number of countries buying in white sugar in the lead-up to Ramadan, coupled with logistical difficulties affecting supply in Brazil. It noted that in euro terms, the world price for white sugar was above the EC reference price (€404/tonne), and that the depreciation in the euro had improved the competitiveness of EC sugar on the world market.

The press release noted that, according to the European Commission, the French beet harvest in 2010/11 could be 32-33 million tonnes, enough to supply all French industrial needs: ‘such a level of production would mean pursuing all options for export.’

Press reports indicate that the granting of full duty-free, quota-free access to the EU market has resulted in an expansion of Zambian sugar exports from 30,000 tonnes to 135,000 tonnes. This is a result of substantial investment by Illovo-owned Zambia Sugar, with full production of 440,000 tonnes now likely to be attained (up from 246,000 tonnes), and exports to the EU expected to expand to 200,000 tonnes within three years. Growth in sugar exports to regional markets is also anticipated. Despite this, Illovo expects ‘a tough year ahead’ because of volatile sugar prices and the strength of the rand.

In Mauritius, while sugar output was better in 2009 than in 2008 (+3.3%), it was lower than the initial forecast of 475,000 tonnes (actual production 467,234 tonnes). This was the result of poor weather conditions at the end of the 2009 season. The Mauritian sugar sector is both diversifying its revenue streams from sugar cane production (electricity cogeneration and ethanol) and moving up the value chain via the export of refined sugar products to the EU market.

Meanwhile press reports indicate that the Jamaican government has agreed to lease its three remaining state-owned sugar factories to a Chinese company, Complant International.

At their meeting in Romania from 27 to 28 May, EU sugar beet growers noted the success of the 2005 round of reforms in closing the gap between EU and world sugar prices and hence the improvement in the competitiveness of EU sugar production. However they argued that the opening of sugar TRQs under new FTA agreements was inconsistent with both the objective of a sustainable EU sugar beet sector and the maintenance of preferences for ACP/LDC sugar suppliers. In this context they called for a consistent EU trade policy.

In terms of the future of the EU sugar regime, the International Confederation of European Beet Growers (CIBE) argued in favour of the retention of production quotas as a market management tool and recommended the contract system favoured in the sugar sector for other EU agricultural sectors. It was felt that the contractualisation of relationships in the sugar sector helped to overcome the inequalities in power relationships in the supply chain arising from a fragmented grower community and a highly concentrated industrial sector.

According to press reports, business analyst Martin Deboo of Investec says that pressure is growing on Tate & Lyle to sell off its sugar division as group profits fall. The ethanol and sweetener arms of the business are not the major generators of profit. Tate & Lyle is now understood to be looking at the profitability of all arms of its business, with traditional parts such as sugar not being immune from this process. This follows on from an announcement by Tate & Lyle that ‘food ingredients were at the forefront of its growth strategy’. According to CEO Javed Ahmed, the company still had a relatively large exposure to more volatile commodity markets, compared with limited exposure to ‘key avenues’ of longer-term growth. However he added that ‘our bulk ingredients and sugar business remain strong and valued businesses, and we will continue to invest appropriately in order to increase their efficiency and generate cash.’

According to other reports, ‘Tate’s refining business has fallen from a profit of £3 million a month in 2007 to, at best, break even.’ Tate & Lyle has initiated efforts to address its problems in securing raw sugar supplies by concluding a pre-financing deal with the government-run sugar industry in Jamaica for the supply of 100,000 tonnes of sugar, and by initiating exports from its joint-venture operations in Laos. While some 22,940 tonnes of sugar was delivered from Laos in 2008/09, it is expected that in 2009/10 this will rise to 44,000 tonnes and will reach 120,000 tonnes by 2011.

Despite these statements, speculation continues as to the future of Tate’s sugar business. According to Sugar Knowledge International (SKIL), while Tate & Lyle did not announce the closure or sale of its sugar assets as many analysts had predicted, British Sugar has ‘put on hold its plans for a refinery at its Cantley beet factory.’

Meanwhile, 51%-owned British Sugar subsidiary Illovo reports that its sugar operations in southern African LDCs are making a growing contribution to group profits, with operations in Malawi delivering 42% of group profits and operations in Zambia some 18%. Illovo however is bracing itself for a more difficult year, given the falling world market price and the devaluation of the euro that has taken place following the financial crisis in Greece.

Tongaat Hulett is also expecting to export increased volumes to the EU and indeed the US market from its operations in Mozambique and, within a few years, its operations in Zimbabwe, attributing its 13% drop in Zimbabwean 2009 sugar production to resolvable local problems.

CommodAfrica reports on further corporate moves, with Castel and Somdiaa shortly to form ‘the biggest sugar group in Central Africa’, once regional agreement has been given, ‘[taking] “French” sugar production to about 260,000 tonnes in Central Africa’. Further strategic acquisition comes with the French cooperative Tereos, Europe’s second biggest sugar group, receiving competition authority permission to acquire Groupe Quartier Français in the French overseas département of Réunion, becoming the sole sugar producer on the island.

For more details of corporate ownership patterns in the EU, see the Agritrade special report ‘Corporate restructuring in the EU sugar sector: Implications for the ACP’ at: http://agritrade.cta.int/en/Resources/Agritrade-documents/Special-report...

Price on world sugar markets are showing volatility, with uncertainties over the state of the Brazilian crop and the perceived unreliability of Indian projections for sugar production. Bloomberg however reports a continued deficit on refined sugar, which, to a degree, is serving to support the white sugar price.

Meanwhile an EC spokesperson has argued that the EC expects no difficulties in finding sugar for the EU market, with the situation where world sugar prices were above EU price levels being ‘an exception’. The EC forecasts sugar imports of 3.1 million tonnes for the year through to September 2010, with 2.1 million tonnes coming from ACP sources, 400,000 tonnes from Balkan suppliers, and 670,000 tonnes from Brazil, Cuba and Australia under the EU’s WTO commitments. An additional 160,000 tonnes from Peru and Colombia are expected in the future under the recently concluded agreements.

ACP countries such as Mozambique and Zambia are expected to increase their sugar exports considerably in the coming period, as potentially could Ethiopia and Sudan. Non-ACP suppliers such as Cambodia and Laos are also expected to substantially increase their sugar exports to the EU on the back of joint Thai and EU investment in sugar production in these two LDCs.

Press reports following the publication of data on the distribution of EU farm support reveal that a number of EU sugar companies were major recipients of EU assistance in 2009. France’s Tereos Group reportedly received over €178 million in assistance from the EU, while Cristal Union received €57.2 million. ABF’s subsidiary, Azucarera Ebro, meanwhile received €119.4 million. Germany’s Suedzucker received €42.9 million in EU assistance, while its subsidiary St Louis Sucre received €144 million. Poland’s Krajowa Spólka Cukrowa for its part received €135 million in EU assistance. This high level of support to the sugar sector arose from the disbursement of support under the EU’s special transitional sugar-sector restructuring support programme.

Press reports in the UK have indicated that ABF has seen a 20% rise in adjusted pre-tax profits, largely on the back of a 39% increase in profits from its sugar business.

Press reports indicate that Illovo-owned Zambia Sugar has increased sugar production by 62% to 315,000 tonnes in the year to March 2010, up from 194,000 tonnes in March 2009. The aim is to reach 440,000 tonnes by March 2011. This will bring production at Zambia Sugar close to its total installed capacity. Exports to the EU increased to 90,000 tonnes to March 2010 from 40,000 tonnes in March 2009.

Production at Illovo’s operations in Malawi meanwhile has fallen 3%, from 304,000 tonnes to 295,000 tonnes.

In April it was announced that the Jamaican government had concluded a forward sales agreement with Tate & Lyle for the supply of 100,000 tonnes of raw sugar. According to press reports, under the deal Tate & Lyle will provide a US$26 million pre-payment and a 50% share of the profit from the sale of refined sugar if the price of refined sugar is over €370/tonne. The agreement is similar to that concluded last year with Eridania-Suisse. This deal needs to be seen in the light of the difficulties Tate & Lyle has recently faced in securing supplies of raw sugar to keep its two European refineries operating at full capacity.

In April it was announced that the state-run Frome sugar factory in Jamaica has produced roughly 41,000 tonnes of sugar in the four-month season that began in December 2009. This compares to an installed capacity of 100,000 tonnes.

On 24 March Czarnikow reduced its estimates of the global sugar deficit for 2009/10 from 14.8 million tonnes to 12.6 million tonnes as a result of a better than expected end to the Indian production season. Nevertheless this leaves a ‘draw-down in global stocks of around 28 million tonnes over the past two seasons’. Sugar is expected to head into a surplus situation in 2010/11, despite falling prices having reduced the incentive for Brazilian mills to maximise sugar production. Czarnikow also reported low investor confidence in sugar.

Against this background, according to the World Association of Beet and Cane Growers, by 9 April 2010 white sugar prices had lost more than 31% of their value since 1 February, while raw sugar prices had lost 44% of their value.

On 12 February 2010, Jamaica began exporting sugar under its new marketing arrangement with the Anglo-Italian company Eridania-Suisse. A further three shipments are planned for March, April and July. The Sugar Company of Jamaica will be paid a minimum of €335.2 per tonne for the 79,000 tonnes of raw sugar contracted to Eridania-Suisse. The government of Jamaica is reported to be negotiating similar preferential agreements to that concluded with Eridania-Suisse with other companies, to provide advance payments that will allow an expansion of sugar production.

The Eridania-Suisse deal was seen as a precursor to the sale of the concerned estates, as the final part of the privatisation process. However in August 2009 it was found that with production costs of 22-23 US cents/lb, the full payment on the Eridania-Suisse deal would fall short of estimated production costs. The profit-sharing agreement on the final sale price of refined sugar produced from Jamaican exports, which forms part of the contract, is expected to cover the bulk of this deficit. Nevertheless, December 2009 saw the announcement that Eridania-Suisse was ‘no longer interested in buying the government-owned sugar estates’, undermining the intended long-term nature of the relationship being developed.

Meanwhile, in Jamaica the EU has approved the grant of €16.8 million (62% in sector budget support and 38% in general budget support) from the Jamaican multi-annual indicative programme (MIP) for 2007-10, to which some €78.4 million was allocated. This grant is to be used to support privatisation and strengthen economic diversification, environmental sustainability and social resilience.

Analysts suggest that the white to raw sugar premium ‘could set new records in 2010’. A white sugar premium of up to US$300 per tonne is being spoken of in some quarters, although it is commonly felt that the premium will lie somewhere between the current level of US$120 and US$160/t during 2010 (US$140/t at the end of February, by mid March it had fallen to US$108/t ). This would give white sugar refiners a greater incentive to invest. This is particularly the case given that ‘strong demand for refined sugar, growing populations and rising incomes are ... expected’. ISO forecasts for the global sugar deficit in 2009/10 have been raised from 7.2 million tonnes to 9.4 million tonnes.

In the short term, Bloomberg reports a decline in New York sugar prices to the lowest level in ten weeks, following the cancellation of planned purchases by Egypt of 50,000 tonnes of sugar and the issuing of all licences for the export of the EU’s additional 500,000 tonnes of out-of-quota sugar by the end of February 2010. Indeed, between 1 February and mid March, raw sugar prices have dropped more that 32%, while white sugar prices have fallen 26%. Some analysts however have suggested that these developments represent more a weeding-out of ‘speculative excess’ from the market, rather than market responses to specific policy decisions.

On 2 February 2010, a €15 million loan from the European Investment Bank (EIB) for the construction of two sugar refineries in Mauritius was announced. The project will ‘improve sugar storage and handling facilities, and extend an existing mill’. This is in addition to a €13 million loan made in August 2009 which benefits from an interest rate subsidy from the 10th EDF. This Mauritian project is ‘the first EIB-funded initiative that implements the 2006 Port Moresby Declaration through which ACP-EU Council of Ministers agreed to mobilise €1.5 billion to contribute to the high adaptation costs ACP sugar-producing countries have faced following gradual sugar price reduction across European markets.’

The investment is closely linked to the restructuring of marketing arrangements for Mauritian sugar, which is now being sold under a long-term agreement with the German company Suedzucker.

German research company F.O. Licht has argued that the huge increase in Brazilian sugar production is laying the foundations for the end of the current sugar price boom, with the projection that prices will fall over the course of 2010. Despite this decline, F.O. Licht said that sugar prices are expected to stay above 20 US cents/lb and argued that expanded production would lead to a balanced market next season. Other analysts, however, have argued that with a sugar supply deficit of between 7.2m and 8m tonnes, prices could remain around the 30c/lb mark. In this context it should be borne in mind that on 11 February, Bloomberg.com reported that China was set to make major purchases of sugar on the world market in April 2010 in order to top up its stocks in the face of a 2m tonne shortfall in production. This could further stimulate prices in the first half of the year, particularly since India, Indonesia, Pakistan, Egypt and Russia are also planning major purchases in the coming months. These demand pressures could serve to support prices until the outlook for the Brazilian and Indian crops is known in July 2010, with the Indian crop being seen as unreliable, resulting in major mills operating at around half of installed capacity.

According to the EC update on price developments in international agricultural commodity markets covering developments in December 2009, the steep rise in global sugar prices is the result of ‘a significant drop in supply in key producing regions against the background of increasing consumption in main importing countries’. While EU sugar production dropped following the implementation of reform measures, good yields have subsequently increased production. World sugar production is expected to recover in 2009/10, yet a deficit is expected to remain sustaining current price levels.

In January, in response to industry pressure following an exceptionally good sugar beet harvest, the EC announced its intention of allowing the export of a further 500,000 tonnes of out-of-quota sugar in the 2009/10 marketing year (to 31 July 2010). According to Commissioner Mariann Fischer Boel, ‘the current situation on the world market is exceptional’, with world market prices ‘currently at record levels, well above the market price for EU quota sugar’. This, it is argued, allows EU out-of-quota sugar to be exported without any need for export subsidies or cross-subsidisation, meaning that exports can take place above the WTO ceiling for export-refund-supported exports ‘without violating the EU’s WTO subsidy commitments’. This is seen as a one-off action, since it is considered that ‘the present market situation for sugar is very unlikely to occur again in the future’.

The Brazilian sugar industry has objected to this EU move, describing it as ‘short-sighted’, since it will further encourage EU beet production. It called for the EU to seek approval from WTO sugar-panel members before implementing the measure. Indeed, the Brazilian, Australian and Thai governments are considering the joint filing of a case against the EU at the WTO in response to the announcement of a further 500,000 tonnes of EU out-of-quota sugar exports. The EC maintains that its decision is legal, since the high world market prices (with refined sugar trading at US$734/tonne in London compared to an EU reference price of US$569/t) and the unusual global shortage mean that EU producers can export without any need for cross-subsidisation (i.e. productions costs of EU sugar producers are below the current world market price). The EC is reported both to have sought legal advice before launching the initiative and to have received assurances that the measure in no way violated the ruling of the 2005 WTO panel (WT/DS265) which defined what constituted subsidisation of exports.

Brazil’s ambassador to the WTO however argues that the nature of the EU sugar regime means that all its sugar production is subsidised, and Australian trade negotiators for their part maintained that this view was endorsed by the previous 2005 WTO ruling. However, since the EU has ‘not released any data that would enable WTO members to make an assessment of the cost of producing sugar in the EU’, the debate seems likely to continue.

The concerned governments have sought to argue that the EC decision was largely responsible for the 15% decline in sugar prices which has occurred since the announcement. However, reports from the World Association of Beet and Cane Growers (WABCG) suggest that this impact may not have been so marked, with the white premium having risen to US$135/tonne in recent weeks, and white sugar prices rising from €528/t to €543/t in the week 5 to 11 February. While raw sugar prices fell from €462/t to €442/t over the period 1 to 11 February, a stronger US dollar may have countered some of the losses this implied for individual national currencies (except for the Brazilian real).

To date, although the three governments that are most concerned have taken the issue to the WTO, they are holding back from taking retaliatory action against the EU, preferring to continue negotiations with the EC with the aim of resolving the issue.

Despite the current dispute, the EC argues that sugar sector reforms have been a success, since they have encouraged ‘high-cost producers to stop production and growers in regions not adapted to beet growing to switch to more profitable crops’, thereby enhancing ‘the overall competitiveness of the EU sugar sector’. According to industry sources, some 800,000 tonnes of out-of-quota sugar is potentially available for export.

It should be noted however that at the same time as the EU is allowing the export of a further 500,000 tonnes of out-of-quota sugar, it is also preparing a regulation to allow ‘the duty-free import of 400,000 tonnes of sugar from the world market to be possibly used by the chemical industry in 2010/11 to ensure the long-term raw material supply planning for this sector’. In addition, ‘access to raw sugar to be refined under CXL import quotas’ (the MFN quota for raw cane sugar opened initially for Brazil and Cuba following Finland’s accession to the EU in 1995) is to be ‘facilitated by the suspension of the requirement to present export certificates from Brazil, Australia and Cuba for imports from these countries in 2009/10. A certificate of origin will be sufficient.’

In response to the high level of German refined sugar production, press reports indicate that German farmers are planning to reduce sugar beet plantings. However, the granting of permission for a further 500,000 tonnes of out-of-quota sugar export licences is likely to reduce the contraction in sugar beet plantings from 10% to about 5%-6%. This season German production of refined sugar was 4.4 million tonnes (up from 3.7 million tonnes on the preceding season), some 1.51 million tonnes above its EU quota of 2.89 million tonnes. This situation resulted from an expansion in planting, exceptional beet yields, and a high sugar content.

In the January 2010 Agriculture News Update it was asserted in the comment that ‘Illovo’s strategic alliance with British Sugar (via Associated British Foods) and the strategic partnership established between the Mauritian sugar sector and Nordzucker need to be seen in this light’. This should have read, within its fuller context: ‘It is clear … that the marketing arrangements for ACP sugar are becoming increasingly complex. How the producers from individual ACP sugar-exporting countries position themselves in the coming years, in response to the changing routes to market that are opening up in the EU, will be a critical factor in determining the long-term future of individual ACP sugar sectors. Illovo’s strategic alliance with British Sugar (via Associated British Foods) and the strategic partnership established between the Mauritian sugar sector and Suedzucker need to be seen in this light’.

CTA apologises for this error.

World market sugar prices continued to rise, reaching 27.5 US dollar cents/lb after Christmas 2009, before dropping to 27c/lb. In early January 2010 some future contracts were trading as high as 28.9c/lb. Meanwhile reports carried by Bloomberg.com suggest that ‘sugar futures may rise to more than 30 cents a pound within the next six to 12 months’, with a smaller Indian crop and demand for ethanol in Brazil pushing up the price. This follows a more than doubling of the sugar price in 2009, on the back of adverse weather damage to crops in Brazil and India.

Reports from the world’s largest stand-alone sugar refiner, the Al Khaleej refiner in Dubai, suggest that there are concerns that ‘the biggest annual gain in prices in more than three decades will lead to “forced demand destruction”’ in the second half of 2010, as the supply of white sugar continues to fall short of demand. Indonesia, India, Iraq, Egypt, China and Pakistan are all seeking to purchase white sugar ‘to cool local prices’. Tanzania, Sudan and Kenya have also emerged as ‘surprise buyers of white sugar’. It is projected that the white sugar premium ‘may jump to US$145 a [tonne] as demand climbs’.

Press reports indicate that Illovo sugar ‘expects to double exports to the EU over the next 4-5 years’ in response to the granting of duty-free, quota-free access. Major production expansion plans are under way in Zambia, Swaziland, Mozambique and Mali, with all but Mali targeting the EU market. Output across the Illovo Group is expected to increase by around 200,000 tonnes to 1.78 million tonnes, while current exports to the EU market are around 150,000 to 160,000 tonnes. Illovo’s expansion is based on the expectation of world market prices of around 20 US cents/lb for the next couple of years, with a decline over three to five years to around 15-16 c/lb. Illovo is not alone in expanding production: there are press reports that Tongaat Hulett has invested some US$47 million in Mozambique to develop 800,000 ha of land for sugar cane production.

Meanwhile press reports based on analysis from J.P. Morgan are warning that sugar futures ‘could fall early in 2010’ to as low as 15 c/lb on the back of ‘a big cane overhang from Brazil’s current harvest’. Concerns over the impact of the large volume of Brazilian sugar cane still to be harvested need to be set against the likely poor quality of this cane and its consequent use mainly for ethanol production. Presenters at a recent ISO seminar suggested that ‘sugar futures prices were likely to stay high due to historically low stock-to-use ratios, steady consumption, and the risks of supply crunch in Asia’. Other analysts suggest that ‘raw sugar futures could bounce up to a 30-40 cents/lb range in the next 18-24 months’ as a result of inflationary pressures. Such projections, however, appear rather unrealistic, with SKIL reporting a stable trend over the last month, with prices trading between 22c/lb and 24c/lb. Meanwhile Kingsman reports the prospect of a ‘shift from a deficit in production to a small surplus in 2010/11’. FAO notes the expanding African sugar production (+3.5%), with strong production growth in LDCs targeting the EU market under the EBA initiative.

The German sugar industry is once again expected to exceed its EU production quota, following favourable weather conditions which saw the beet yield increase from 61 tonnes per hectare to 67 tonnes/ha and the sugar content of harvested beets increase from 17.81% to 18.32%. The expansion of production was also supported by a 4.3% increase in beet plantings. German refined sugar production is set to reach 4.11 million tonnes, up from 3.7 million tonnes last year. The head of German sugar industry association WVZ commented that ‘with 116,000 [tonnes] of unsold stocks transferred into the new season … Germany will probably produce about 1.3 million tonnes of sugar above its EU production quota of 2.89 million tonnes’.

Overall EU prospects for sugar production are reported as relatively good, with actual production falling far less than the nominal quota reductions would suggest. The EU will nevertheless become the world’s largest sugar importer in the coming years.

This is likely to increase sugar exports, a development assisted by the EU’s decision in October to increase the ‘maximum permitted volume of non-quota sugar which can be exported in the current 2009/10 season from 650,000 tonnes to 1.35 million tonnes’. However the bio-ethanol industry is also expected to be a large customer.

The increased concentration of ownership in the EU sugar sector is a matter of growing concern to national competition authorities in the EU, with, according to press reports, at least three investigations under way at national level into ‘cartel activity to fix prices and divide up customers and territory’. According to one press report, the German company ‘Südzucker is one of the companies being investigated for cartel activity’, although ‘it denies any wrongdoing’.