EU proposes suspension of duty-free sugar import scheme

PARIS, Jan 27 (Reuters) - The European Commission plans to propose the suspension of duty-free sugar imports to ease pressure on European producers facing falling prices and increased competition.

"I will propose a temporary suspension of the sugar inward processing regime to ease pressures on sugar producers," the European Commissioner for Agriculture and Food, Christophe Hansen, said on X late on Monday.

Hansen did not disclose when any suspension might begin.

MIXED REACTION

The inward processing relief (IPR) scheme allows companies to import sugar at zero duty and without limits, provided the sugar is refined or processed into food products and then re-exported outside the European Union, but the announcement drew mixed reactions.

European sugar beet growers lobby CIBE expressed strong support for suspension of the IPR scheme, saying it would be timely and necessary.

"It will provide the right signal and some relief on a very depressed EU sugar market," the group said on X.

Producers have said imports contributed to a supply glut that led EU sugar prices to slump to their lowest in at least three years.

But the sugar fermentation industry, sugar refineries and sugar user groups said the fall in prices was because of sugar beet overproduction and called on the Commission not to suspend the IPR scheme.

"Suspending inward processing relief would raise production costs for EU manufacturers, hindering their ability to compete internationally and threatening their ability to remain in global markets," they said in a joint statement.

Raw sugar imported into the EU under IPR in the 2024/25 marketing year rose 19% from the previous year to 587,000 metric tons, 95% of which came from Brazil, European Commission data showed.

White sugar imports under IPR were up 5% at 155,000 tons in 2024/25, with 43% coming from Brazil, followed by Morocco, Egypt and Ukraine, the data showed.

European sugar producers have raised concerns about unfair competition and the potential impact of a trade deal with the Mercosur bloc of South American countries, including a larger sugar quota.