Nicaragua is able to sell 10,163 metric tons duty free to the EU.
Altogether, the Central America's total export quota adds up to 150,000 tons.
Mario Salaverria, president of the Sugar Association of El Salvador said the decision to sell the sugar was due to "uncertainty about the problem they had with Italy and that delivery times won't allow them to make the most of this access."
In the remainder of the year Nicaragua will only take advantage of 30% of the eight million pieces of textiles that the EU has assigned it, meaning that sales will be worth just $2 million.
Dean Garcia, executive director of the Nicaraguan Association of the Textile and Apparel Industry, explained that with one quarter of the year left it will be difficult for Nicaraguan firms to find new European customers.
Nicaragua, Honduras and Guatemala managed to place the product in Europe at $480 per metric ton, $120 above the price on the international market.
The auction was held under the framework of the Association Agreement between Central America and Europe. Although it was possible to place the sugar at a good price, producers had wanted to sell it for $500 per ton, said Mario Amador, general manager of the National Committee of Sugar Producers (CNPA).
Nicaragua and Honduras are allowed to sell 65,000 more metric tons duty-free to the European Union.
The country has given approval for both Nicaragua and Honduras to receive this benefit temporarily, until the trade agreement becomes effective for Guatemala. "The Council of Ministers of Economy and Trade for Central America (Comieco) gave authorization this weekend for each country in the region to be able to make available its quotas at will" reported Nicaraguahoy.info.
The European Union will not mediate in the distribution between the Central American countries of the sugar quota of 60,000 tonnes allocated to the region.
"The European Union will only check the total regional quota has been reached and will not intervene in how it is distributed among the five Central American countries. The distribution and quota management is an internal matter for the Central American region," said Klara Klanska, commercial counselor of the EU to Central America.
The auction to place 17,000 tons with 35 European buyers was annulled because of an inability to meet deadlines.
The information was confirmed by Mario Amador, general manager of the National Committee of Sugar Producers (CNPA). "... The auction in which Nicaragua and Honduras intended to sell about 17 thousand tons to 35 European buyers from 10 business houses set up in different countries, could not be completed because of non compliance with certain technical conditions ...", reported Elnuevodiario.com.ni.
Nicaragua and Honduras want to regionalize the EU quota, to be able to offer 53,000 tons of sugar.
Producers want the export quotas that the sugar growers in Costa Rica, El Salvador and Guatemala were not able to meet, as in those countries the Association Agreement is not yet in force, said Mario Amador Rivas, general manager of the National Committee of Sugar Producers (CNPA).
The sector, which was ready to export 10,000 tonnes of sugar to the European Union, must wait two more months to do so.
Non-acceptance by dairy farmers in El Salvador and Costa Rica of the geographical indicators for Italian cheeses has caused a delay of at least 60 days of the entry into force of the Association Agreement with the EU.
"We were ready to export, but if there is no treaty we will have to send the sugar to another market at a lower price than would have been paid by the Europe" said Julio Arroyo, CEO of the Sugar Association of El Salvador.
Each of the Central American countries are entitled to export a minimum of 160 tons, with flexibility of origin.
Each of the countries has been assured 4% of the four thouand metric tons which correspond to exports to the European Union.
According to Salvador's Deputy Minister of economy, Mario Hernandez, the agreement establishes that among the six countries of Central America, 24% of the quota will be distributed equally, ie 4% or 160 metric tons.
The Association Agreement between Central America and the European Union will enter into force on August 1 for countries which ratify it before July 15.
From a press release from the Ministry of Foreign Trade of Costa Rica (COMEX):
Today, the deputies in charge of foreign trade of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama met in San Jose, where they held a video conference with the Director General of the Directorate General for Trade of the European Commission, Joao Aguiar Machado, who served as Chief Negotiator for the European Central America Association Agreement (CAAA). During the meeting they discussed the progress of the registration of geographical indications in the legislative process and approval of the Agreement.