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Pacnews
Fri, 4 May 2007
NADI, FIJI ---- A study of the Sugar Protocol as provided in the Cotonou Agreement has recommended that African, Caribbean and Pacific (ACP) sugar producers press for increased tonnage of sugar exports to European markets.
PACNEWS understands that ACP states, of which Fiji is the lone member from the Pacific, are pushing that the tonnage be increased from 1.3million to 1.8 million a year.
The study, carried out by Professor Stephen Thornhill recommended that an increased Protocol tonnage would safeguard benefits under the Protocol in the short term, especially with the sugar price reduction of five percent coming into effect from this year.
A total reduction of 36 percent in sugar prices will be phased in until 2009. Its part of the European Commission’s reform of its sugar regime, especially the preferential sugar prices offered to ACP countries under the Cotonou Agreement. The EU sugar regime must be World Trade Organisation (WTO) compliant.
Under the Sugar Protocol negotiated with the European Commission (EC) in the 10970’s, Fiji and 17 other ACP sugar producing countries enjoy a guaranteed price, three times better than the world price, duty free access of sugar exports to the European market for an indefinite period.
But the EU has now offered ACP countries an increased Protocol tonnage but added new tonnage for non Protocol countries for one year (2008-2009).
From 2009 – 2015 least developed countries and non Protocol countries would be allowed quota free and duty free access for their sugar exports into the European market.
ACP countries are concerned that this EC offer could mean the end of the Sugar Protocol.
“The EC offer tantamounts to an attack on the Sugar Protocol. And this is unacceptable and we will fight for what is rightfully ours, said Dr Arvin Boolell, the ACP Ministerial spokesman on sugar.
The Fiji communique on sugar endorsed at the end of the weeklong meeting in Nadi, ACP sugar ministers urged the EC to keep in mind Article 36 (4) of the Cotonou Agreement – to review the commodity protocol bearing in mind the special legal status of the Sugar Protocol.
“It is our considered view that the EC offer does not comply with the provisions of this Article.
At present, Fiji’s sugar sales to the European Union is under a quota at a fixed price of FJD$970 (US$600) a tonne. This is to come down drastically with the phased in reduction of upto 36 percent as demanded by the European Commission.
Fiji contributes 180,000 tonnes of sugar to the European market, earning around FJD168 million (US$104 million) a year. That revenue is expected to go down to FJD$127 million (US$78 million) from next year, as the reduction in sugar price begins to kick in.
According to sugar projections in the proposed National Adaptation Strategy report on sugar (NAS), Fiji’s sugar price per tonne will be reduced to $709 (US$439) a tonne in 2007 and drop to $560 (US$346) a tonne in 2009.
The NAS projection is based on the assumption that Fiji will continue to be able to sell the equivalent of its present quota to the EU.
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