French Sugar Beet Growers See Brexit Risk As Market Recovers
Large French sugar and ethanol exports to Britain could suffer under new trade terms between the European Union and its former member, clouding prospects for producers seeking to benefit from a recovery in prices, France's sugar beet growers' union said.
France, the EU's largest sugar producer, usually supplies between 300,000 and 400,000 tonnes of white sugar per year to Britain, accounting for around two-thirds of EU sugar exported to Britain, the CGB said.
With the outcome of negotiations between Britain and the EU to establish a new trade relationship by January still unclear, French producers fear Britain will turn more to imported cane sugar from outside the EU, Pierre Raye, the CGB's director, told reporters.
"If there is a (British) tariff reduction for cane sugar while French and EU sugar face increased tariffs, then you will see Britain use its own refining capacity to a greater extent," Raye said.
The immediate effect would be moderate since a poor sugar beet harvest will limit French exports this season, but there was a risk of longer-term trade disruption, including by Britain re-exporting to Europe refined sugar made with cheaper imported cane, he added.
Britain is also a significant outlet for French sugar-based ethanol fuel, with about 2 million hectolitres exported per year, the CGB said.
After a price downturn in the two previous years, which led to sugar factory closures in France, and this year's disastrous harvest marked by crop disease and drought, the CGB expects a deficit on the world market to get prices back above growers' production costs next year, it said.
This year's crop damage caused by jaundice disease, which is spread by aphids, represented about 280 million euros ($335 million) in lost revenue, it estimated.
The disease impact led the French government to pass legislation to allow sugar beet growers to use a group of pesticides, known as neonicotinoids, previously banned due to risks for bees.