World sugar market
Crop losses in the 2009 calendar year in Brazil and India, the world’s two largest producers, drove up world market prices. The raw sugar quotation in New York reached a thirty-year high on 1 February 2010 at € 670.2 per tonne. White sugar futures likewise jumped to a record high, quoting at € 767.0 per tonne on 21 January 2010. Since then, the commodity exchange prices have seen a downward trend.

In its current forecast for world sugar production in the 2009|10 sugar marketing year (October 2009 to September 2010), F. O. Licht, a German-based analytics firm, predicts an increase of 5.1 million tonnes in global production to 156.0 million tonnes. Of this total, about 34.6 million tonnes represents production from sugar beet (up 2.5 million tonnes from the 2008|09 sugar marketing year) while cane sugar accounts for approximately 121.4 million tonnes (up 2.6 million tonnes). Despite the anticipated rise in global sugar output, a sugar deficitis predicted for the 2009|10 marketing year in view of estimated consumption of 163.3 million tonnes.

Sugar regime
The EU sugar regime which took effect on 1 July 2006 is in force until September 2015. The key elements of the sugar market reform are the reduction in the reference price for EU quota sugar by 36%, a cut in the beet price by 40% and the lowering of European sugar production by 6 million tonnes. A total of 5.8 million tonnes of production quotas (for sugar, isoglucose and inulin syrup) was surrendered to the restructuring fund. The restructuring premiums for the quota surrendered by AGRANA during the 2008|09 sugar marketing year were received in full in June 2009. AGRANA holds a production quota of about 618,000 tonnes. In January 2010 the European Commission announced that there will not be a final quota reduction.

Since 1 October 2009 the European sugar market is open to imports from the world’s Least Developed Countries (LDC) through the Everything But Arms (EBA) initiative and open to imports from the African, Caribbean and Pacific (ACP) group of states under the Economic Partnership Agreements (EPA). Tariffs and volume limits were entirely eliminated. A special safeguard provision is in place to permit the renewed introduction of protective duties when certain import quantities are exceeded.

For the 2009|10 sugar marketing year, the Commission has granted the chemical industry a duty-free import quota of 400,000 tonnes of out-of-quota sugar. To compensate for the import quota, it allowed the sugar industry to make unsubsidised exports of 650,000 tonnes of out-of-quota sugar and 50,000 tonnes of isoglucose to the world market. In view of the exceptionally favourable weather conditions and resulting good yields for non-quota sugar, the Commission on 14 October 2009 increased the export licences for non-quota sugar to 1,350,000 tonnes. This export volume limit was further raised in January 2010 in response to world market prices through a one-time increase of 500,000 tonnes of non-quota sugar to a new total of 1,850,000 tonnes. AGRANA has sufficient export licences for the non-quota sugar sales in the 2009|10 marketing year.

Sugar exports
The WTO-II negotiations running since 2001 have thus far remained inconclusive. Their successful completion in the near future is currently regarded as highly unlikely. The negotiating mandate given to the European Commission by the member states remains in effect.