RIGA - The sugar production quota at Latvia's sugar mills will be slashed 8.6 percent 's or 5,746 tons 's in the 2006/2007 season, the Agriculture Ministry reported. Ministry spokesperson Dagnija Muceniece said the mills would be allowed to produce 60,759 tons of sugar instead of 66,505 tons. The European Commission has suggested not to reduce production, but "transfer the 5,746 tons of sugar to the next year or add them to the excessive sugar stocks."
But the ministry believes both proposals would cause losses. Muceniece said if the mills transferred the sugar to next year, it would deplete working capital since the mills can't sell the sugar, only store it at their own expense. If the mills opted for adding the sugar to the excessive stocks, it would be sold according to regulations 's only for technical uses or fodder, she said.
Representatives of the Liepaja and Jelgava mills said the sugar production cut was considerable. Both said that shareholders were planning to meet and decide on the future of the mills. EU agriculture ministers have officially approved the proposed sugar reform on Feb. 20, which is due to take effect as of July 1. Under the reform, the price of sugar is likely to be reduced by 36 percent within four years.
