EU beet sugar has export potential after quotas dismantled

* EU beet yields have increased strongly

* Gap between EU, Brazil sugar production costs has fallen

By David Brough

PETERBOROUGH, England, Nov 13 (Reuters) - Exports of EU beet sugar, once output quotas are dismantled in 2017, will be feasible due to improved efficiencies in EU production in recent years, industry leaders said on Friday.

EU sugar production quotas will be lifted after Sept. 30, 2017, forcing sugar producers in the European Union to compete freely on the world market. The EU is now a net sugar importer.

With (Other OTC: WWTH - news) the protection of production quotas, EU beet sugar producers have boosted efficiency via mechanisation, improving yields at a faster rate than cane production in top grower Brazil, Martin Todd, a senior industry consultant, told a one-day seminar organised by NFU Sugar.

"The European sugar industry has done remarkably well in terms of production and farming processes," he said.

"Beet yields have increased incredibly strongly over the past 20 years, and that is strengthening sugar beet's position in crop rotation, and is positive for beet crops in the long term."

Todd added: "The end of quotas will be a good opportunity for the efficient producers in Europe to expand production, and supply the internal market and the world market."

The European Commission has forecast the 2015/16 sugar beet yield in France at 88 tonnes per hectare, in Britain at 71.7 tonnes and in Germany at 69.6 tonnes.

In the 1990s, the average yield in France was 70 tonnes, while in the 2000s it rose to 80 tonnes, according to a report issued by the International Sugar Organization.

In Britain the average climbed from 51 tonnes in the 1990s to 58 tonnes in the 2000s while in Germany it increased from 52 tonnes in the 1990s to 60 tonnes in the 2000s, ISO figures show.

Valerie Vercammen, general secretary of Belgian beet growers' group CBB, said the gap between Brazilian and EU costs of sugar production had narrowed.

"There will be export possibilities for us (Belgian sugar factories)," she said.

"European manufacturing is becoming more efficient."

Richard Pike, managing director of British Sugar, a unit of Associated British Foods (LSE: ABF.L - news) , the UK's leading sugar supplier, said the lifting of EU production quotas would create opportunities to boost sugar output and sales.

He said he saw the immediate priority for British Sugar as boosting sales in the domestic market where the Peterborough-based processor has maximum comparative advantage.

He said that, in terms of the competition with French producers, UK yields had been moving closer to those in France.

The export potential for EU beet sugar would depend on world sugar prices after 2017, which were hard to forecast now.

"Now (NYSE: DNOW - news) we are in an environment of low world sugar prices. That environment will change at some point," Todd, managing director of LMC International, said. (Additional reporting by Nigel Hunt; Editing by David Evans)