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Modelling The Effects Of Eu Sugar Market Liberalization On Area Allocation, Production And Trade

Author

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  • Grethe, Harald
  • Nolte, Stephan
  • Banse, Martin

Abstract

This paper presents a partial equilibrium simulation analysis of EU sugar market reforms with a version of the European Simulation Model (ESIM) addressing three issues: preferential EU imports are a function of the price differential between world market and EU price, EU supply functions are estimated based on FADN data, and the production of bioethanol in the EU and the rest of the world is taken into account as an important component in sugar beet and sugar cane demand. It is found that the current sugar market reform including the restructuring process until the end of 2007 is sufficient to allow the EU to comply with its WTO commitments only very narrowly. EU sugar supply is simulated to decrease from roughly 19 million tons in the base period to 15.5 million tons by 2015 and the EU price remains at a level of about 450 €/t and thus significantly above the reference price. In case of full liberalization production in the EU is projected to decrease to 7.5 million tonnes by 2015.

Suggested Citation

  • Grethe, Harald & Nolte, Stephan & Banse, Martin, 2008. "Modelling The Effects Of Eu Sugar Market Liberalization On Area Allocation, Production And Trade," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6329, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6329
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    File URL: http://purl.umn.edu/6329
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    References listed on IDEAS

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    1. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    2. Nolte, Stephan & Grethe, Harald, 2011. "Der Markt für Zucker," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61.
    3. Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovacik, Karen & Matthey, Holger & Saak, Alexander E. & Tokgoz, Simla & Chavez, Eddie C. , 2004. "FAPRI 2004 U.S. and World Agricultural Outlook," Staff Reports 32046, Food and Agricultural Policy Research Institute (FAPRI).
    4. Alexandre Gohin & Jean-Christophe Bureau, 2006. "Modelling the EU sugar supply to assess sectoral policy reforms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(2), pages 223-247, June.
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