April 6, 2005

Sugar industry against European plans

The Mozambican sugar industry opposes the changes proposed by the European Commission in the European Union sugar regime, fearing that this will hit profits and lead to job losses.
Tony Currie, manager of the Maragra sugar company, in the southern Mozambican district of Manhica, warned that, if the current plans go ahead, Maragra would have to take "corrective measures" in order to survive. Maragara has invested about 70 million US dollars in rehabilitating the sugar plantation and mill, after new shareholders, including the South African Illovo group, acquired the company in 1999. The current EU system allows sugar producers who, like Mozambique, are members of the ACP (African, Caribbean and Pacific) group to export a quota of sugar to Europe at a guaranteed price that is much higher than the world market price.

The reforms now planned involve reducing subsidies to European sugar farmers, ending the quota system - but also ending the guaranteed preferential price. So Mozambique may no longer face quota restrictions in the European sugar market, but will find that the price has collapsed. According to Currie, that would lead to a drop in Maragra's profitability, and would affect the lives of its 4.000 seasonal and about 2.000 permanent workers. He said the company has no plans at the moment to make any redundancies - but this may have to be reviewed if the Europeans do not rethink their reforms to the sugar regime. As one consequence of the European decision, Maragra might have to reduce its support to a number of social development projects. The result of that would be to increase, rather than reduce poverty, Currie noted. (Agencia de Informacao de Mocambique, Maputo)


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