Austria-based sugar and starch group Agrana is to close one of its sugar refining plants in Hungary, as the European country cuts its sugar production.
Agrana plans to focus its sugar production in Hungary at its Kaposvár facility after the country’s government decided to cut sugar output by 50%. Some 140 jobs will be affected.
The move comes amid ongoing EU reform of the sugar sector. The EU wants to reduce the over-production of sugar among member states and is offering farmers financial inducements to leave the industry.
In recent years, subsidised EU sugar prices have been higher than global prices. The European Commission is looking to make Europe’s sugar sector more competitive by cutting subsidies over four years, in a bid to reduce supply and lower prices.
Brussels has warned it will make compulsory cuts if not enough sugar production has been given up by 2010. After talks between the Hungarian government and local sugar beet growers and the local sugar industry, Hungary decided to give up half of the country’s sugar quota.
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