The sugar giants which forced Europe to curb production, on grounds of unfair subsidies, did the region a favour by prompting a sector makeover, European Commission farming boss Lars Hoelgaard said.

Mr Hoelgaard said that the European Union sugar industry had "come out stronger" from the restructuring forced by the World Trade Organisation after complaints from Australia, Brazil and Thailand.

While the process forced steep cutbacks in production, with sugar beet plantings falling by more than one-quarter below 1.6m hectares since the reforms began five years ago, focusing on the region's most efficient producers had raised yields by more than 20% over the same period.

"Thanks to our Brazilian, Australia and Thai friends, we have significantly improved the competitive situation in the EU sugar industry," Mr Hoelgaard, the commission's deputy director general, agriculture and rural development, told world sugar leaders.

Return to exports? 

Indeed, the improvement had opened the way to a loosening of the WTO restrictions, which in essence apply only while the cost of EU sugar production is above world prices.

"We have the potential to get back on the world market," he told the World Association of Beet and Cane Growers' conference.

He added: "I am not saying that we are going to be a net exporter. That will depend on situation with regard to quotas and with regard to prices."

Still, with world sugar supplies at historically-tight levels, in terms of world stocks compared with consumption, the jump in market prices to their highest levels in nearly three decade seen earlier this year "who knows… might just repeat itself".

The rise allowed the EU to export a further 500,000 tonnes above its quota agreed with the WTO.

The export quota falls to 650,000 tonnes in 2010-11, and the EU is forecasting imports of 4.4m-4.9m tonnes in 2014-15.

'Compete more freely'

Separately, Mauro Virginio, senior commodity analyst at ED&F Man, also flagged the EU's "growing competitiveness" saying that the region's beet growers should "absolutely not" be afraid of the rise of cane nations such as Brazil and Thailand.

Over the last 40 years, beet growers in France, Europe's most productive growers, had increased yields by 136% compared with 120% growth in Thai cane yields, and an increase of 83% in Brazil.

"As EU production costs drop, the region will be able to compete more freely, and potentially without WTO caps," he said.

While Europe's sugar production costs, at about $0.22 a pound including freight, were high by global standards, they were being pressed lower by processing, farming and seed improvements.

Costs in Brazil, at $0.145-16 a pound, were lower but increasing, thanks to the expansion of production into more remote areas.