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Dept for International Development

Answer

Mr. Paice: To ask the Secretary of State for International Development what estimate she has made of the potential impact of production of sugar by Brazil on the economies of the African, Caribbean and Pacific and Everything But Arms countries if a global free market in sugar were to be established. [100629] Clare Short: Winners from a free world sugar market are likely to be low-cost producers with the ability to compete on an open market, whereas the high-cost (thus less efficient) producers are likely to lose, unless their industries are restructured. Brazil is estimated to be the lowest cost producer in the world and has the potential to respond very quickly to increased demand and supply large quantities of sugar at around the current world price. It is hard to predict what the situation would be like under complete liberalisation, although it is expected that Brazil will absorb a large share of the world market, as will Australia. However, among the ten lowest cost producers in the world (1993-98) are also Zimbabwe (before Australia), Zambia, Malawi and Swaziland who are therefore also potential winners. Some ACP countries like Swaziland are low cost producers and therefore likely to benefit from further liberalisation. Also efficient ACP LDCs, like Malawi, Zambia and Mozambique stand to gain. For ACP countries like Jamaica and Madagascar who are high cost producers and heavily dependent on the preferential access granted by the EU, the sugar industry might need some restructuring to be able to compete.

Secondary information

Type

Written question

Reference

100629; 400 c1130W;400 c1120-1W

Session

2002-03

Subjects

Developing countries Economic situation Production Sugar Brazil ACP countries Free trade

Link

View this Written question on www.publications.parliament.uk