Sugaronline Editorial - Looking to 2020 By Meghan Sapp
Published: 05/02/2017, 11:27:00 AM
It's time to get ready for 2020 but too many can't yet look past October 1.
It was a packed room at the Kempinski Hotel in Geneva last week as 350 professionals from across the European sugar industry sat with bated breath at the 7th Annual Kingsman EU Sugar Seminar to get a glimpse into what will happen when quotas end October 1.
The answer is, nobody knows.
What’s worse is that farmers will have to make their planting decisions this summer, well before the market absorbs what most expect will be a bumper beet crop that will likely weigh on prices—weather willing, of course. Until then, it’s going to be a tight market as the trade bloc seeks to wheedle down its stocks and out of quota sugar into nothing in order to provide a soft landing for new crop sugar that will hit the market as soon as September.
So it’s not just that nobody knows what will happen in 2017/18, but 2018/19 is up in the air too. Will farmers feel confident enough to expand beet area for 2018/19 and take the plunge this summer? Or will they see the coming global surplus and decide to hold off on a valiant return to the global market until prices have the chance to recover?
Over the course of the nearly two-day seminar, there was a lot of speculation about where EU sugar will eventually go and how far it could go by looking to the past. The future, however, is entirely uncertain. The European Commission’s representative for sugar and olive oil tried to assure the industry by showing how much better off the end-of-quota sugar market will be compared to how it was when dairy quotas were phased out in 2015. But just as he was starting to talk about reform of the Common Agriculture Policy for 2020, he was shut down because time was running out.
Running out? Of course time is running out. For the industry, 2017 is finished and 2018 might as well be for all of the control that there is over the situation. So really, it’s the CAP reform for 2020 that holds any opportunity for engagement, but sadly the organisers felt it wasn’t important.
CAP reform, as it always is, is highly important in Europe. Two reforms ago was the beginning of where we are today. The last reform set in motion consolidation after the brutal destruction that resulted from the reform prior. This next reform is set to consolidate the industry even further, ensure that the strongest survive and that the weakest are left to shrivel out in the sun. In Brussels, the talk is already starting…quietly, slowly, but knowing the something big is coming down the line.
Apparently they have yet to notice in Geneva.