eu reforms could boost sugar prices

also increased use of ethanol
CSR could be a goer.


EU reforms may boost prices for sugar producers
By Rafael Epstein

Australian sugar producers are hoping to get more business after changes announced by the European Union (EU).

EU agriculture ministers have agreed to reform their sugar industries but the Australian Government will still be pushing for other big changes to agricultural subsidies within the union.

The EU ministers agreed to cut the guaranteed price paid to their sugar producers by 36 per cent after three days of tortuous negotiations in Brussels.

The commitment comes with a $12.5 billion compensation package.

The EU normally pays around $2.5 billion in sugar subsidies each year, with its farmers receiving three times the average world market price.

Australia is unlikely to get more sugar exports to Europe but the reforms could lead to long-term increases in world sugar prices.

The deal may also enhance the EU's bargaining position ahead of world trade negotiations next month in Hong Kong.

The World Trade Organisation (WTO) had ruled the EU subsidies were illegal following a complaint from Australia, Brazil and Thailand.

The Federal Government says the EU's move is significant reform, but it is decades overdue.

The acting Prime Minister, Mark Vaile, says he hopes it will allow the EU to meet its WTO obligations to cut subsidised sugar exports by about 4 million tonnes a year.