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
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
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
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