From: CUTS International
Trade Policy Issues for a Regional Sugar Market in CARICOM
Trade Hot Topics, The Commonwealth, Issue 141
Reform of the EU sugar policy on 1 October 2017 will result in sugar prices within the EU aligning more closely with world prices. This will lower income for industries that have preferential access to this market, including producers within the Africa, Caribbean and Pacific (ACP) regions. Creation of an integrated sugar market within CARICOM, with the implementation of a common external tariff (CET) on all sugar imports, is one way to support regional sugar industries in the future. The reason Caribbean sugar industries will continue to require support following EU policy reform is that they cannot compete at world prices, which are extremely volatile.
The high cost of producing sugar in the Caribbean stems from modest levels of productivity, which are limited by the region’s tropical agro-climate (and the growing effects of climate change) and the small scale of factories. Productivity is low by international standards in both field and factory operations, and this inflates producers’ costs. This is true, especially when compared with Brazil, the price-setter in the world market.
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