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Last Updated: Monday, 20 September, 2004, 20:04 GMT 21:04 UK
Mauritian fear over sugar exports
Growing sugar cane
The EU is the world's largest purchaser of sugar
Mauritius could see its foreign income slashed if reforms of European Union sugar subsidies go ahead, an industry official has warned.

EU farm ministers are discussing plans to abolish the system which keeps EU sugar prices more than three times higher than the world market rate.

But the Mauritius Sugar Producers Association (MSPA) said exports to the EU would be severely hit by the move.

Mauritius would lose about 3bn rupees ($105m; 59m) in revenue, it said.

Proposals currently being considered by the EU could see sugar prices cut by around 40%.

Heavily reliant

"If the reforms go ahead as they are, it will entail a significant reduction in the price paid by the EU for our sugar," said MSPA director, Patrice Legris.

"It will have a major effect on the Mauritian economy and will result in a reduction of about 3bn rupees in revenue every year for the country, which is a lot for a small island economy like ours."

Many sugar producing nations in Africa, the Caribbean and across the Pacific rely heavily on sugar exports to EU markets.

The EU is the world's largest sugar purchaser and currently buys around 535,000 tonnes of sugar a year from Mauritius, which is the world's seventh-largest exporter.

"If these reforms go ahead, they are likely to take effect as from next year, which is too short a time for us to take measures to reform our industry in an appropriate manner," Mr Legris said.

He called for a smaller and more gradual price cut - as well as compensation - to help Mauritius restructure its sugar industry.

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