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."
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).
Added to the 17 thousand tons that Nicaragua and Honduras can offer are 25,000 from Guatemala, which will be auctioned to buyers from the European Union.
Elnuevodiario.com.ni reports that "Nicaragua and Honduras are offering 42,000 tons of sugar in the electronic auction to be held today for the second time under the framework of the Association Agreement, or AA, between the European Union and Central America, after the first round was unsuccessful. "
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.
The country won't cede its sugar quota to Nicaragua and Honduras, and it opposes to Guatemala, El Salvador and Panama conceding theirs.
For Costa Rica, Guatemala and El Salvador the Association Agreement with the European Union has not yet entered into force, so they are prevented from offering their sugar in an auction where 35 buyers bid to bring it to market in the old continent.
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.
The Nicaraguan sugar industry expects that the entry into force of the Association Agreement will allow it export to the EU about 25 thousand tons of raw sugar, from the 60,000 quota for the entire region.
For the moment the quota allocated to country is 21,600 tons per year, with the possibility of growing 550 tons per year, but the sugar industry expects that with the advantage of being one of the first countries to ratify the agreement it will be allowed to increase its quota for the first year of the Association Agreement (AA).
The region has defined the allocation of 150,000 tons of tariff-free sugar quotas granted by the EU.
The largest allocation went to Guatemala with 65,000 metric tons, followed by El Salvador with 24,391 tons, Nicaragua with 21,681 tons, Honduras and Costa Rica with 19,464 tons each.
The quotas have been defined at private company level and are therefore subject to approval by respective governments.
On Friday 30 July the region will share out the 150,000 ton tariff-free sugar quota granted by the EU.
The meeting will take place in Managua, Nicaragua.
Carlos Melara, general manager of the Honduran Association of Sugar Producers (Apah), indicated that Honduras expects a quota of 25,000 tons.
"We expect a fair allocation that reflects the history and growth of the country, as well as Honduras' significant contribution to the EU negotiations", Melara told Elheraldo.hn.
Between 2 and 5 years will pass until the Association Agreement with Europe enters into force, but Costa Rican exporters are already studying how to compete in that market.
Being more and more competitive seems to be the basic recipe to effectively compete in the EU’s 500 million person market.
Costa Rican businessmen are already seeking the necessary tools to achieve this indispensable increase in competitiveness: advice and training in how to export to Europe, business networking and adapting their goods to Europe’s demands and preferences.
Both blocks decided to concede in what seemed to be irreducible positions, making last minute concessions yesterday.
One of the key issues was denominations of origin: Europe demanded laws to protect brands such as champagne and manchego cheese. The other was how many dairy products would be allowed into the Central American market. The latter was closed when Central America agreed to allow 1.900 tons of powder milk with reduced tariffs and 3.000 tons of cheese, excluding fresh cheese.
The EU conditioned increasing sugar quotas on a wide list of benefits for dairy products, passing over ceramics and even services.
José Orive, Executive Director of Sugar Producers of the Central American Isthmus (AICA, acronym in Spanish) noted that: “Europe continues to be reluctant to change their position.”
Lourdes Quintanilla, writes for Laprensagrafica.com: “The last time that the EU accepted opening its doors to sugar and honey from Central America, negotiators successfully reached a quota of 60,000 tariff-free tons, which had to be shared among five countries. Later, an increase in the quota to 100,000 tariff-free tons was unofficially mentioned as a possibility.