EU sugar imports are running behind last season, a European Commission official said on Monday, with supplies expected to fall to their lowest level in six years before the bloc liberalises its regime in October. Applications for import licenses under the preferential Economic Partnership Agreements (EPA) and Everything But Arms (EBA) schemes stood at 766,000 tonnes as of April, Miguel Garcia Navarro, the Commission's head of sugar and olive oil said.

The Commission now sees import totals under these schemes for the season at 1.360 million tonnes, down from a previous forecast of 1.625 million tonnes. "We are running behind last year's levels," Navarro told the Kingsman EU Sugar Seminar. The slowdown is mainly due to lower output in African producing countries this year, coupled with lacklustre European Union demand as it approaches sharply higher production from October 1.

Brazilian raw sugar imports under the CXL scheme, which are subject to a duty of 98 euro per tonne, have also slowed down, with just 15 percent of the quota allocated so far this year, according to Commission data.

Dwindling stocks have prompted the Commission to propose special measures which are due to be discussed later this week that include reclassifying out-of-quota stocks so they can be sold on the internal market, as well as allowing additional raw sugar imports at lower tariffs. However, the proposed measures have been criticised by producers who say they will hurt prices just as the EU heads towards market reforms that are expected to boost production by 20 percent.

Producers reiterated their opposition on Monday, with Elisabeth Lacoste of the International Confederation of European Beet Growers saying they "absolutely do not understand" why the Commission is trying to add additional supplies. Robert Guichard, president of the Committee of European Sugar Users (CIUS), meanwhile, said the European market is headed for "big trouble" in July and August and needs additional supplies to bridge the gap.

Copyright Reuters, 2017