Can a year ever have more than 12 months?

Brazilian cane industry leaders are to take the European Union to task at the World Trade Organization over sugar export plans which appear to involve extending to 15 months the last crop year to avoid breaching trade limits.

"The strategy appears to be an attempt to circumvent decisions that the EU should be upholding before the global community," Geraldine Kutas head of international affairs at Unica, the Brazilian cane industry group, said on Monday.

"It is clearly in breach of commitments under WTO rules for sugar exports."

The comments allied Unica to Australian peer Canegrowers, which warned over the threat to prices of the EU's move, after it in February last year also raised sugar exports above WTO limits.

That move "was the catalyst for the loss of market confidence and world sugar prices subsequently collapsed", Alf Cristaudo, the Canegrowers  chairman, said.

"It appears history is about to be repeated."

'Accounting trick'

The spat centres over a decision by the EU last week to add an additional 700,000 tonnes of sugar to the 650,000 tonnes of exports it has already permitted for the marketing year as usually defined, running from the start of October to the end of the following September.

That brings the bloc up to its total exports of 1.35m tonnes as permitted by WTO rules.

However, the EU also has a further 700,000 tonnes of export licences which, while "issued last year [2010-11] will, in practice, only be used in this [2011-12] marketing year", a commission briefing paper said.

Canegrowers put it that "in an effort to circumvent its international obligations, the EC has extended its 2010-11 marketing year by three months to December 31".

Ms Kutas said: "The EU's decision amounts to little more than an accounting trick, to allow for an increase in sugar exports within the 2011-2012 season.

"The EU cannot behave as if the marketing year is suddenly 15, and not 12, months long."

Weak finish

Unica's comments came as it unveiled latest cane crush data indicating a weak end to a poor season for output in the Centre South, which produces about 90% of sugar in Brazil, the top exporter of the sweetener.

Sugar production for the first half of this month came in at 1.26m tonnes, down 200,000 tonnes year on year.

And rapid closure of mills, in the face of falling cane crops, meat that there would be a "substantial decline in the amount of cane crushed in the coming weeks", Antonio de Padua  Rodrigues, Unica technical director, added .

"We expect less than 35 mills to be operating by the end of the month," he said, out of a total of 310 in the region. At the start of this month, 89 had yet to close for their seasonal shutdown.