Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development [614321]

Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development
Vol. 1 7, Issue 3, 2017
PRINT ISSN 2284 -7995, E-ISSN 2285 -3952
1
SUGAR MARKET IN THE EUROPEAN UNION AND ROMANIA
STUDY ON PRICE DEVELOPMENTS

Daniela -Elena ȘURCĂ

Research Institute for Economics in Agriculture and Rural Development , boulevard Mărăști, no.
61, zone 1, cod 011464, Bucharest , Romania, telephone 021.313.60 .87, e -mail
[anonimizat]

Corresponding author : [anonimizat]

Abstract

This paper is based on analysis of the sugar market at national and European level on the development of prices for
the sugar market which will analyse the problems leading to stagnation and imba lance national sugar
production, try solving the problems identified at national level taking as examples beet farms in Europe for
analysing prices.
Through sugar market perspectives we have identified the proposed strategy f or market development, her objectives
and factors affecting the price of sugar in Romania, evolution of prices and consumer price indices.

Key words : demand, production cost, supply, consumer price, the sugar market.

INTRODUCTION

World sugar producti on exceeds 115 million
tons and is located in growing areas of raw
materials : beet and cane sugar.
Beet production area is specific for the
temperate zones, is located in Europe and
North America, but also in the southern
hemisphere. The biggest production is owned
by Europe, yields per hectare is about three
times higher in East than in the West.
Demand an nual sugar Romania is about
700,000 tons and production in our country is
about 135 700 tons of sugar (raw) of beet
sugar which are intended to obtain 430,000
tons of refined sugar while the annual
consumption nationally is about 685 700 tons
of white sugar. The difference between what
is produced in the cou ntry and annual
consumption, is at least 120,000 tons of white
sugar , which is provided by the Europ ean
Union through imports .
With a low production, Romania needs
massive imports of raw sugar to ensure
national consumption, our country entered the
new system to reduce the quotas only in 2008 –
2009, and gave up to 44, 752 tons of sugar . [4]

European Unio n agriculture ministers have
formally adopted in 2006 a reform of the
European sugar sector. The old system which
had remained unchanged for 40 years, was
thus aligned with the rest of the Common
Agricultural Policy (CAP) reforms. Following
the reform of t he minimum price was reduced
by 36% from 631.9 to 404.4 euros per tons in
2009/2010.
Production in the European Union, after only
three years of this reform was reduced by 5.8
million ton s by closing 80 factories, the loss
of 25,000 jobs in rural areas, 13 8,000 farms
have given up cultivating beet sugar and beet
acreage in the European Union fell by
700,000 ha.
In our country it was recorded the smallest
reduction in the rate of 4% while other
countries have reduced their quota by at least
14-15%. On sugar reform at European level
an essential element, which came into force as
of July 1, 2006, was the establishment of a
restructuring fund funded by the leading
producers of sugar coming to help the
restructuring process making i t the industry
more competitive . The main objective would

Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development
Vol. 1 7, Issue 3, 2017
PRINT ISSN 2284 -7995, E-ISSN 2285 -3952
2 be to balance the market, taking a share of
almost 6 million tonnes [2]

MATERIAL S AND METHOD S

Materials and methods we could use are
collecting and interpreting data for the study
on evolution of prices, also we used following
methods:
Methods of quantitative analysis
 Involving the use of statistics.
 Generally based on collection and
processing of data "dimensions" great
 Research result is expressed in the form of
indicators (average percentage), graphs and
tables.
 Comparative analysis method
 Interpretation of results;
 Generalizations evaluation of the results.
 Economic indicators – financial; indices; [3]

RESULTS AND DISCUSSIONS

Surfaces and production of sugar beet in
Europe – the main producing countries of
sugar beet at Eu ropean level and the top three
countries with the largest areas for this crop
are France, Germany and Poland
In 2014 the total area planted with sugar beet
in Europe is 1.6231 million ha, which 59.8% –
(more than half) is owned by the countries
mentioned a bove. In 2014, France a had the
most hectares of sugar beet in Europe, with a
cultivated area of 406 000 ha, in the same
year Romania had only 31,000 ha
The fewer hectares cultivated was in Portugal
just 400 ha, these being affected by the reform
of 2007 w here production quotas for this
country was drastically reduced, France holds
25%, Germany 22.9% and Poland 11.7% of
the total European Union for this culture,
more than half, while 38% is divided among
the 35 remaining countries. Romania has a
rate of 1.8 8%.
The highest percentage in Europe in
production of sugar beet they register are the
same countries mentioned above, they have
the highest productions because they are
holding the largest surfaces. Other EU
countries have 37% of total production at Europ ean level. Romania holds a small
percentage of 1% compared to the main
producing countries

Fig. 1. Situation areas in percent of sugar beet at
European level in 2014
Source: Own determination b ased on Eurostat data [14]

Fig. 2 Situation percentage production of sugar beet at
European level , 2014
Source: Own determination b ased on Eurostat data [14]

Surfaces and beet sugar production in
Romania
Out of 23.8 million ha as totals in Romania,
the agr icultural area used farm is about 13.3
million ha (55.9%), of which about 9.3
million ha is arable land.
Productions by use: arable land occupies
about 62.5% of agricultural land, cereals and
oilseeds occupy about 80% of the arable area
planted with sugar beet in 2014 is 31,000 ha
representing only 0.33% of arable land
Romania.

Table 1 surfaces cultivation of sugar beet
Source: www.insse.ro
Period Hectares
Year 1990 162.675
2010 22.029
2011 18.816
2012 27.303
2013 28.144
2014 31.000

Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development
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3 In the abo ve table are shown the areas planted
with sugar beet in 2014 and 2010 at the same
time looking at 1990, it found that the
surfaces of sugar beet grown considerably
decreased. In 1990 registering a very large
surface area cultivated the 162 675 ha, 2014
represen ting a decrease of 80.9% of the
hectares planted with sugar beets.
Making a comparison between the year 2014
and year 2010 we see an increase of 8971 ha
compared, which represents an increased
interest in sugar beet in recent years.
Sugar beet surface s in Romania gradually
decreased from year to year, the greatest
decrease is recorded in the 2014 compared to
1990 , reporting the 2014 at every year there is
the surface area increased by 64.8% compared
to 2011, which is the largest growth area for
years b efore the study except 1990, where
cultivation areas of this product were
enormous compared to the current .
The average production per ha of sugar beet
in 2014 was over 40 tons with 7,000
kilograms more than the previous year, where
the average yield was l ess than 36 tonnes.
Because the weather was rainy in 2014 is
observed this increased production per
hectare.

Fig. 3 Average production / ha at national level
Source: www.insse.ro

Lowest a verage production recorded in 1990
due to agro -technical works of the time . As
illustrated in the graph occur s a decline in
average yields/ ha from 2010 until 2012 due to
climatic conditions, so that in 2013 the
production increase , it is remarkable that the
year 2014 recorded the highest pro duction,
which is 43 tonnes / ha.

Price evolution in the European Union 2010 –
2014: [13]
In accordance with art. 9 of Regulation (EU)
No. 1370/2013, the minimum price for beet
quota referred to in art. 135 of Regulation
(EU) No. 1308/2013 is 26.29 EUR / t , up to
September 30, 2017.
Beet price can increase / decrease depending
on the sugar content, as follow:
a) For each sucrose content is increased by
minimum price:
 0.9% sucrose containing more than 16%
but not more than 18%
 0.7% sucrose containing more than 18%,
but not more than 19%
 0,5% sucrose containing more than 19%,
but not more than 20%
b) For each 0.1% of sucrose content is
reduced by the maximum price:
 0.9% sucrose content is below 16%, but
not more than 15.5%
 1% sucrose content is below 15.5%, but
not more than 14.5%
c) The minimum price for beet quota to be
laid down by was:
 32,86 euro / tonne for the 2006/2007
marketing year
 29.78 euros / tonne for the 2007/2008
marketing year
 27.83 euros / tonne for the 2008/2009
marketing year
 26.29 euro / t in marketi ng year 2009
The reference price for white sugar was fixed
over time:
 631.9 euros / tonne for each of the
marketing years 2006 to 2008
 541.5 euros / tonne for the marketing year
2008 -2009
 404.4 € / t in marketing year 2009
The reference price for raw sugar is fixed at:
 496.8 euros / tonne for each of the
marketing years 2006 to 2008
 448.8 euros / tonne for the marketing year
2008 -2009
 335.2 euros / tonne in the 2009/2010
marketing year
As can be seen in Table 2 price for beet sugar
in Europe declined in the year 2014 , because
of high interest growing , over the last years ,

Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development
Vol. 1 7, Issue 3, 2017
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4 this culture, this has led to increased global
production and thus lower prices worldwide .

Table 2 Evolution of the numb er sugar beet prices
2010 -2014 – (euro)
Source: www.eurostat/database.com [15]

Prices in Europe decreased on average by
17%, in Poland one of the main producing
countries in Europe decreased by 14.83%
price, this percentage has affected many
producers and these decreases resulted as
noted earlier the continuous reduction of the
surface in recent years.
Beet price trends 2000 -2014 in Romania :
As you know price is the exchange value of a
good or service on the market at times and
different places, it refers to the amount of
money you pay someone to purchases of
goods or money it receives someone to
possession of a good yield.
As can be seen in able 3, there was a rapid
evolution and light variable from year to year
of prices per tonne of product analyzed. In
2011 the price per tonne of sugar beet
increased by 50 lei compared with 2009.

Fig. 4. Price evolution
Making a comparison between 2014 and 2000
found that prices increased by 280.95% in
2014 compared to 2000 and with 77.95%
compared to 2007 were registered a decrease
of 5.88% in 2014 compared to 2013.

Table 3 . Price evolution for average pri ces
Source: www.insse.ro , www.eurostat/database.com
Source: Own calculation.

Consumer price indices (CPI) measures the
evolution of prices and tariffs of goods
bough t, services used by the population in a
specific period relative to a n earlier period. [1]

Table 4 . Consumer price indices
Source: www.insse.ro , www.madr.ro

Fig. 5. Annual evolution of con sumer price indices

Consumer prices, measured by the consumer
price index, were higher in 2001 compared to
2015 average of 42.1%. Consumption
decreased because of factors influencing the
price listed above.
The second highest value recorded for
consumer i ndex is observed in 2007
(125.37%). As noted in the chart above are
continuous fluctuations.
years 2010 2011 2012 2013 2014
Belgium 29.26 30.73 28.68 29.26 26.34
Czech
Republic 28.08 28.63 32.29 31.76 29.72
Germany 36.39 36.64 35.34 31.42 29.03
France 24.87 24.55 29.98 27.17 26.57
Croatia : 39.81 39.29 39.19 24.19
Netherlands 43.00 45.00 60 61 50.12
Austria 28.78 37.77 40.57 35.18 23.18p
Poland 28.31 34.95 32.78 35.44 30.16
Romania 28.49 40.10 38.12 38.47 35.58
Slovakia 36.37 36.13 36.7 40.09 37.07
Finland 32.09 26.76p 34.9 41.78 41p %
2014/2000 2014/2007 2014/2013
280,95 77,95 -5,88

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Vol. 1 7, Issue 3, 2017
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5

Fig. 6. Price evolution in the major sugar producing
countries than Romania (EUR / tonne)

Although Romania bring a small part of t he
sugar beet market that keeps prices relatively
high compared with major producing
countries. The lowest costs of production are
found in France
Sugar prospects of the market at European
and N ational level in 2014 -2020 :
According to European Commission
estimates, production quotas in 2016 had a
positive impact on the production of beet
increased by 1.9% and the price of sugar,
which would fall by 8.2% until 2020 . Also
provided is an increase of 6.9% of EU sugar
exports, while imports will be reduced by
4.7%. The elimination of quota system have
benefit because European producers will be
guided more by world prices than the prices
for domestic market .

Table 5. Average production, cost of production and
profit in 2014 for beet and cane sugar
Source: www.e urostat/database.com

Source: www.eurostat/database.com

The highest production / ha of sugar beet in
the world is owned by Germany 60.3 t / ha,
because the climatic conditions are very
favoura ble and appropriate use of hybrids has
resulted in increased production. On the
opposite side are Poland with an average yield
of 19.5 tons and a profit of 16.1 EUR / 100 kg
sugar, 16.5 euros less than the profit Germany
32.6 euro / 100 kg . The highest sugarcane
production has Australia almost 100t / ha, but
recor ded a profit of 12.3 euro per 100 kg
because for sugar cane processing costs are
relatively high compared to those for sugar
beet.
At national level – sugar production in our
country has never achieved annual quota
granted by the EU. The President of the Sugar
Employers in Romania, Gheorghe Bejan,
believes that the priority of Ministry of
Agriculture and Rural Development for this
segment would have been achieving annual
quota sugar production.
European Union has allocated an annual quota
of 104 688 tonnes of sugar beet for Romania,
It is estimated that in 2007 sugar beet growers
had lost about 18 million euros because
Romania did not a chieved annual production
quota, which otherwise, does not cover
consumption . [12].
Future goals for the sugar market :
 Protection of the EU sugar market from
extreme price fluctuations for the product
and also ensure constant offer for sugar ;
 Creating a strong, competitive sector that
can withstand international competition ;
 Creating and / or providing high living
standards f or farmers ;

Scient ific Papers Series Manag ement , Economic Engineering in Agriculture and Rural Development
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6  Implementation of quality standards and
compliance ;
 Increase market transparency ;
 Diversification of products from sugar,
providing an affordable price but also
increase competition for this sector

CONCLUSIONS

Following this paper I realized that areas
planted with sugar beet globally and
nationally are declining , due to cane sugar
which remains number one in the world to
obtain the sugar . The sugar it produces in
huge quantities in other countries of the
world , and its use has a negative impa ct on
sugar beet, sugar cane registering an annual
growth of 2 -2.5% in the structure f or
consumption.
In conclusion national productions were
accomplished based on quotas allocated by
the European Commission and that would
allocate production quotas greate r Romania,
this market not supposed to depend on
imported sugar and could become an exporter.
European Commission has removed in 2016
the quota system for sugar production and
minimum prices, this has a positive impact on
the production of sugar beet and t he sugar
price, European production and national
increased and this i t will be noted within
exports and imports .
What is clear is that the sugar sector is in
constant reform and shall be made more
efficient and more flexible, closer to the
customer and the market it serves.

REFERENCES

[1] Dinu Toma, C ourse Costs, Prices and Tariffs, 2014
[2] Dona Ion, Curs Common Agricultural Policy , 2014
[3] Nicolae Ioana, Curs financial analysis , 2013
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Romania ”, publisher Ars Acad emica, 2010
[5] Zahiu Letitia, ”Policies and agricultural markets „,
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[13] ***http://www.dsclex.ro/legislatie/2016/mai2016/mo2
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[14] ***http://ec.europa.eu/eurostat/web/agriculture/statisti c
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[15] ***http://ec.europa.eu/eurostat/tgm/table.do?tab=table
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