The European Union agriculture ministers have recently agreed to cut the prices offered to European sugar farmers by 36%, bringing the EU sugar rules into line with global frameworks.
African sugarcane producers are among the first beneficiaries. This change was demanded of the European Union after the World Trade Organisation (WTO) ruled that its existing 40-year-old guaranteed pricing system was illegal.
The WTOs judgement followed a formal complaint from sugar cane producing countries. Countries like Australia, Brazil and Thailand will now benefit from a reduction in subsidised European sugar on the global marketplace, along with other smaller sugar producing countries in Africa like Uganda, Cameroon, Rwanda and Kenya.
In the past, international campaigning groups for poor countries have highlighted many times the absurdities of agricultural subsidies, by focusing on those for sugar, a product that developing countries are especially good at producing. The sugarcane raw material generates sugar, anhydrous alcohol (a gasoline additive) and hydrated alcohol for the internal and external markets, with different price and demand dynamics.
It is expected that the abolished subsidies by the European Union on European sugar farmers will lead to more production of sugar cane in the developing countries, especially in Africa.
International sugar prices are ruling now around $ 350 a tonne, which is good news for sugar mills also in Africa.
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