Sunday, May 01, 2005

Estonia stuck over sugar for jam row

Estonia is facing a fine of up to 2 per cent of its gross national income over its sugar stockpile. There was a huge surge in sugar buying in the run up to accession as both traders and private households engaged in what the Commission suspects were speculative mass purchases. There was justified anticipation that sugar prices would rise substantially in new member states after accession a year ago as most of them had not had their own sugar subsidy regimes - or certainly not on the lavish scale of that provided by the EU.

Estonia claims that of the 91,466t of extra sugar that suddenly appeared on the Estonian market last year, two-thirds was bought up by private households so that they could indulge their traditional pasttime of making jam and preserves to provide high energy food the year round. Given that Estonia's population is a little over 1.4m, all one can say is that they must be the most enthusiastic jam makers in the world.

A short-term fix

The European Commission decided in mid-April to give Estonia and four other new member states an extra seven months to get rid of their surplus sugar stocks. This can be done by processing it into animal feed or biofuel or by exporting it as C sugar, i.e., without EU export subsidies.

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