Sugar producers to face expensive intervention to reduce oversupply

The government wants to intervene on the sugar market due to the present oversupply of around 300,000 tonnes but, rather than financing the int ervention from the budget, plans to put the burden on the sugar mills. The cost of producing one kilo of sugar in Poland is estimated at zl.1.8 while worldwide prices are around zl.1 per kilo, as refining sugar from cane is much cheaper. Hence, the government's plan of exporting surplus sugar will prove very costly for the mills. This concept was implemented in 1999 when those mills which were in relatively sound financial shape sold the sugar abroad incurring huge losses. Meanwhile, the ailing plants had their sugar taken over by creditors who sold it domestically at prices below the g overnment-set minimum. This scenario could be repeated now, infuriating foreign investors who acquired the mills as they will once again have to pay for regulation the market. (Gazeta Wyborcza, p. 23) T.J.