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The European Commission has adopted a Regulation reducing for the 2002/2003 marketing year (beginning on 1 July) the production quota in the sugar sector.

The quota has been reduced by a quantity of 862,475 tonnes (respectively 826,988 tonnes for white sugar, 17,173 tonnes for isoglucose and 18,314 tonnes for inulin syrup). This will bring the quotas to a total of 14,241,110 tonnes compared to 15,103,585 tonnes last year.

This reduction effectively represents a linear cut of 5.71% in the existing quotas for the different sugar products, the Commission said. The reduction is necessary to bring the EU in conformity with its WTO obligations. These WTO commitments limit the budget for export refunds to €499.1m (US$492.4m). Without this reduction, export would increase and the refunds paid would exceed this limit.

The Australian and Brazilian governments are mounting a challenge to the EU sugar subsidies through the WTO. To read more about this, click here.