At a time when the world is facing its biggest sugar glut in at least four years, trade barriers mean the European Union is contending with a second consecutive annual shortage.

EU supply will fall 1.1 million tons short of demand in the 12 months ending in September, according to the Committee of European Sugar Users, whose members include Nestle SA (NESN), Unilever and Kraft Foods Inc. Global output will exceed usage by 5.32 million metric tons, Macquarie Group Ltd. predicts. As world sugar prices fell 23 percent in the past eight months, costs in the 27-nation bloc reached a two-year high.

The EU, once the second-biggest sugar exporter, spent about 5.2 billion euros ($7.1 billion) since 2006 to shrink the industry after the World Trade Organization ruled it was dumping subsidized supply on world markets. At the same time, the bloc failed to scrap import duties, leaving users with the choice of either paying about 60 percent more than in the international market or shunning purchase and shuttering production.

“We can’t buy sugar in the EU because there isn’t any,” said James Lambert, chief executive officer of Northallerton, England-based R&R Ice Cream Plc, Europe’s largest private-label producer. “Anything like fizzy drinks, ice cream and bakery products is going to rise dramatically.”


http://www.bloomberg.com/news/2011-10-1 ... ities.html