Sugar Standing Report

An Expert's View about Tropical and Subtropical Fruits, Sugar Cane in Portugal

Posted on: 31 Mar 2012

Portugal imported 463,000 metric tons of raw sugar for processing by its 3 refineries in Porto, Lisbon, and Coruche in 2010/11.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 3/23/2012 GAIN Report Number: PT1202 Portugal Post: Madrid Portugal Sugar Standing Report Report Categories: Sugar Approved By: Robert Hanson, Agricultural Attaché Prepared By: Diogo Machado Mendes, Agricultural Specialist Report Highlights: Portugal imported 463,000 metric tons of raw sugar for processing by its 3 refineries in Porto, Lisbon, and Coruche in 2010/11. Imports of raw sugar have been decreasing over the last two years since reaching a maximum of 523,000 tons in 2008/09 due to difficulties in accessing raw sugar at competitive prices on the world market. Disclaimer The following report is a Voluntary GAIN report on the sugar industry and market in Portugal. This report complements the EU-27 Annual Sugar Report. The data below is shared to help characterize the Portuguese industry and market ? none of the figures are official USDA data. Production: The only region still producing sugarbeet in Portugal is the Azores where 305ha were harvested in 2011 that resulted in the net production of 7,955 tons of sugarbeet. The average polarization was 17.64% and from this sugarbeet 718 metric tons of white sugar was produced. According to regional sources the low levels of rain from May to June resulted in a much lower production than previously anticipated. On the other hand the old age of the processing plant did not allow making the most of the high polarization level which translated into a low production of white sugar in 2010/11. A similar area is being sowed for the 2011/12 season. Consumption: Total use is estimated at around 425,000 tons raw value. Total human consumption has been stable over the last years. On a white sugar basis numbers point to a per capita consumption of 36.3 kg of sugar per capita in 2010/11. Table 1. Portugal Sugar Production, Supply and Demand Portugal Sugar, Centrifugal (1000MT) 2010/2011 2011/2012 2012/2013 Market Year begin October 2010 October 2011 October 2012 Post Estimate Post Estimate Post Projection Beginning Stocks 0 0 0 Beet Sugar Production 1 1 1 Cane Sugar Production 0 0 0 Total Sugar Production 1 1 1 Raw Imports 463 465 470 Refined Imp.(Raw Val) 179 187 182 Total Imports 643 652 652 Total Supply 643 653 653 Raw Exports 0 0 0 Refined Exp.(Raw Val) 213 230 230 Total Exports 213 230 230 Human Dom. Consumption (Raw Value) 413 410 410 Other Disappearance 17 13 13 Total Use 430 423 423 Ending Stocks 0 0 0 Total Distribution 643 653 653 Source: FAS-Madrid estimates and GTA Trade: Portugal imported 463,000 metric tons of raw sugar for processing by its 3 refineries in Porto, Lisbon, and Coruche in 2010/11. Imports of raw sugar have been decreasing over the last two years since reaching a maximum of 523,000 tons in 2008/09 due to difficulties in accessing raw sugar at competitive prices on the world market. Trade in refined sugar decreased in 2010/11 with imports down 17 percent from the previous year to 179,000 tons raw value and exports down 23 percent to 213,000 tons raw value, causing a squeeze in sugar stocks. If refiners cannot get political support at national and EU level to guarantee access to raw sugar at more competitive prices they may be forced to continue decreasing their refining activity and resorting to using their packaging lines to package imported white sugar. Under this scenario imports of refined sugar may increase in the coming years. Policy: Access to raw sugar According to media reports, a Portuguese Member of the European Parliament (MEP) recently questioned in writing the EU Farm Commissioner Dacian Ciolos on more effective measures to address the difficulties that sugar refiners have in accessing raw sugar on the world market. The Commissioner answered by noting that in the first quarter of every marketing year the EU issues import certificates to full time refiners only and that this ?privilege? is meant to allow refineries access to sufficient quantities of raw sugar for processing. However the Commissioner also aired the possibility of again authorizing the introduction in the EU market of extra-quota sugar and/or allowing supplementary imports with reduced duties as has happened in previous campaigns. Sugarbeet According to press from the National Assembly, a group of deputies from the PSD, the most represented party in the National Parliament and one of the members of the coalition is power, recommended that the Government takes ?the necessary diligences, in national and communitarian terms, to give the sugar processor in Coruche the necessary means to process sugarbeet, and to keep a mixed system with capacity to simultaneously process sugarbeet and raw sugar?. Portugal decided to relinquish 100 percent of its quota for the processing of sugarbeet in exchange for EU compensation as part of the 2006 sugar market reform. The Portuguese Association of Sugar Refiners (ARAP) classified this proposed resuming of sugarbeet production in the country as a risky choice. In its view sugarbeet was not profitable when Portugal relinquished its quota rights in 2006 and there is no guarantee that current high prices can be sustained.
Posted: 31 March 2012