E.U. taking steps to equalize beet, cane sugar production

In a rickety warehouse on the banks of London's Thames sit mountains of caramel-colored raw cane sugar. For centuries the sweet stuff has come across the seas to Tate & Lyle Sugars' dockside factory, to be refined into the white stuff.

Cane accounts for four-fifths of global sugar production, but only one-fifth of Europe's. Most of the continent's sugar is made from beet, similar to how it's made in Minnesota.

No surprise, then, that the sugar-beet industry has been well guarded by Europe's Common Agricultural Policy. But in recent years the European Union has reformed its system of quotas and subsidies to lower food prices and enhance its farmers' competitiveness; production quotas for milk were dismantled in 2015, for example.

Now it is sugar's turn. Complex restrictions on sugar imports will remain, as will income support for farmers. But in October, the E.U. will abolish its minimum price and production quota for beet.

The beet sector has already been restructured in anticipation. E.U. compensation incentives have facilitated the closure of factories and a decline in the number of beet growers propped up by state support.

Thanks to improved seeding technology, beet yields have been rising, said Kona Haque from ED&F Man commodities-trading house. This is particularly true of the "beet belt," which runs through parts of Britain, France and Germany where production could rise by over 17 percent this year, she said.

The change in rules could mean that the E.U. becomes a net exporter of sugar for the first time in more than 10 years.

The deregulation does not mean that cane and beet are on an even footing in Europe, said Gerald Mason at Tate & Lyle Sugars.