Denmark-based ingredients group Danisco is to close a sugar plant in Lithuania as it scales back production in the EU.

Danisco said it would cut its sugar output in the Baltic state by 13.5%, a move that will lead to the end of production at the company's Panevezys in the country.

Some 200 jobs will be affected, Danisco said. Sugar production will remain at Danisco's site in the Lithuanian town in Kedainiai.

"Only moderate investments will be required to obtain the capacity needed to produce the expected future quota volume at that factory," Danisco said.

In recent years, subsidised EU sugar prices have been higher than global prices and the European Commission has looked to make Europe's sugar sector more competitive by cutting subsidies over four years.

Sugar producers who have been uncompetitive at lower price levels have been offered financial inducements to leave the industry.

Brussels has warned it will make compulsory cuts if not enough sugar production has been given up by 2010.