Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by the Sugar Traders Association of the UK (O52)


  1.  The UK is an important centre for the sugar trade, and the new EU Sugar Regime should facilitate the operation of the markets.

  2.  Consequently, the EU Sugar Regime should operate in a consistent and transparent manner, and there should be regular and meaningful trade consultations at European and national level.

  3.  Adequate consultation and notice should be given of changes to the regime and to supporting legislation, with due regard given to the implications of such changes to our members, as stakeholders.

  4.  The new Sugar Regime should reflect commercial realities in areas such as quality standards, environmental and welfare issues.

  5.  Anti-fraud measures, while welcome, should not jeopardise the activities of legitimate traders or place them at a competitive disadvantage.


  6.  The Sugar Traders Association of the United Kingdom (STAUK) welcomes EFRA's invitation to comment on the forthcoming review of the European Union Sugar Regime. The Association represents large and small sugar traders in the United Kingdom, with both domestic and international interests.

  7.  The UK is long established as the international hub for the sugar trade and is home to LIFFE whose No 5 futures contract is the benchmark for white sugar trade globally. Our members facilitate a viable and transparent market for sugar and desire that the UK remains a premier sugar centre, serving both the European and international markets.

  8.  Consequently, the future shape of the common organisation of the EU sugar market is of considerable interest to our members.

  9.  While we accept the likelihood of changes to the Common Market Organisation of Sugar, we would not want such changes to unduly disadvantage our members.

  10.  The key to any trading operation is access to sugar and the commercial relationships and technical synergies that develop in this respect over time. Should changes be deemed necessary, we feel that these should be phased-in over an appropriate time period and signalled well in advance. This will allow our members time to adjust, ensure the maintenance of an orderly market and enable our members to continue to meet their clients' requirements both within the Community and in third countries.

  11.  In relation to the previous point, consideration should be given to market developments resulting from EU enlargement, before any policy options on sugar are taken.

  12.  It is important that the CMO Sugar and associated implementing measures are applied and administered in a consistent manner across the Community so as not to create artificial barriers within the single market, nor to disadvantage our members on the internal and international markets.

  13.  Any tendering activities within the new CMO sugar should be carried out in a consistent and transparent manner to facilitate the operation of the market and with due regard to the commercial realities of the world market place in order to maintain the competitiveness of our members.

  14.  In 2003, the average daily volume of trade in sugar futures on LIFFE was over 4,000 lots, or 200,000 tonnes, with the total volume for the year exceeding one million lots or 50 million tonnes. This white sugar futures market is fundamentally based upon European sugar, and is thus intrinsically linked to the physical trade in and export of European sugar (although by no means exclusively). The viability of any futures market relies on known rules and can easily be jeopardised if these parameters change. We feel that it is important therefore, that the potential for market disruption be considered in the application of the CMO Sugar and associated implementing measures.

  15.  A new CMO Sugar should take into account the internal market requirements of the Community, particularly in relation to quality standards, environmental concerns and general welfare issues. It is important that should greater market access be granted, a level playing field is maintained, so as not to disadvantage existing operators who cannot lower their standards.

  16.  The EU is quite rightly concerned about the potential for fraud within the CMO Sugar. It is in our interests that such diligence is maintained and with the Community's ongoing commitments to providing preferential market access, will continue to be a challenge. While we appreciate such concerns, it is essential that anti-fraud activities are carried out in a manner so as not to jeopardise the operations and activities of legitimate traders, nor place us at competitive disadvantage internationally.


  17.  Our main concern is that the new EU Sugar Regime is operated in a consistent and transparent manner with ongoing consultation with the trade through our European association (ASSUC) and with Member States and their traders through the forum of Management Committee meetings. Our members have always been very willing to co-operate with the EU and national authorities.

31 March 2004

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2004
Prepared 12 July 2004