EC plans shake-up of sugar subsidies for chemical industry

05 October 2000 15:20  [Source: ICIS news]

LONDON (CNI)--A proposed re-organisation of the European Union (EU) sugar market will alter the way that special aids are paid to the chemical industry, with Brussels shifting the burden of meeting their cost from its budgets to those of sugar producers.

At present a production levy is paid by the EC and sugar producers. It is designed to help offload surpluses by refunding the difference between the EU and world sugar prices on sales to the chemical industry.

Under the new plan, announced Wednesday by the European Commission (EC), producers will be required to finance the whole of this refund. Under the present system Brussels pays subsidies for production under 60 000 tonne and the sugar industry pays the remainder.

The chemical industry currently uses about 350 000 tonne of sugar annually and is increasing its usage quite rapidly. Sugar is used in a number of pharmaceutical preparations, including penicillin, and to make citrus acid and other ingredients for food products.

By: Alan Osborn
+44 20 8652 3214

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