The sugar supply squeeze costing European Union refiners dear, and provoking fears for "thousands" of jobs, may be more than a one-off, with the region facing further seasons of emergency import measures.

The weaker prices forecast by the Organisation for Economic Co-operation and Development (OECD), which believes white sugar will average well below $500 a tonne next year, imply that the EU may in a rethink of sugar regime avoid significant changes to its import regime.

"Low prices are expected in 2012-13 and 2013-14 that make a case for retaining the [current] quota system during the period in which quota is being debated," a US Department of Agriculture report said.

The EU's current arrangements see the EU charge import duties on all imports of sugar, at E339 a tonne for raw sugar, and corn sweeteners, at E507 a tonne, apart from purchases from some countries with historic ties, or are seen as economically undeveloped.

Sugar exporters such as Australia, Brazil, Cuba and India are allowed quotas below which the tariffs do not apply.

 Back to the future

However, with sugar values set to recover from 2014 according to the OECD, a failure to revise the quota system risks a repeat of the shortages seen last year, when a buoyant market took prices above the region's, usually competitive, levels.

"Higher-than-average prices are forecast for [2014-15 to 2016-17], probably producing a situation like that in 2010-11 where imports are hard to attract," USDA officials based in Europe said in a report.

The region looks particularly ill-favoured by shifting dynamics in many African countries which have historically been major exporters to Europe, but which look like consuming themselves an increasing quantity of their production.

"The European Union would be in strong competition for sub-Saharan African exports," without an appreciation in the euro to improve its appeal to shippers, the report said.

"The suggestion is that nimble changes in additional reduced-tariff imports may be increasingly called upon to keep available supply close to EU demand."

Jobs threat

The European Commission expanded reduced-quota-and out of quotas, allowed [food quality] sugar imported for industrial use to enter the food market, and acted to stimulate the region's sugar beet sowings in an effort to boost supplies last year.

Nonetheless, refiners have complained at a shortage of raw sugar supplies for processing into white sugar, saying they were being forced to rely on higher-duty imports on top of historically elevated sugar prices.

"Our industry has been forced to pay nearly E35m ($45m) in the last seven days alone to get its hands on raw material supply that its refineries and the market desperately need," Joao Pereira, the president of the European Sugar Refiners' Association, said three weeks ago.

"Our industry is running at 60% capacity and this is just not sustainable. Thousands of high-quality European manufacturing jobs in our industry are at stake."