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COM (83) 242 
 
 
 
Vol. 1983/0 101 
  
 
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COMMISSION OF THE  EUROPEAN  COMMUNITIES 
COM(83) 242 final 
Brussels, 28 April 1983 
COMMUNICATION FROM THE COMMISSION  TO THE COUNCIL 
ACP sugar:  the problem of ocean freight  costs 
COMMUNICATION FROM THE COMMISSION  TO THE COUNCIL 
on the guaranteed  prices applicable  in the 1983/84  delivery period 
to cane sugar  originating  in the ACP  States referred  to in 
Protocol 7 annexed to the  Second ACP-EEC  Convention  and 
in the overseas  countries  and territories  (OCT) 
referred to in  Council Decision  80/1186/EEC 
COM(83) 242 final 

No. I 
COMMUNICATION  FROM THE COMMISSION  TO THE COUNCIL 
ACP sugar:  the problem  of ocean freight costs 
1. During the 1982  negotiations  on ACP  sugar guaranteed  prices  it was  agreed 
that an examination  of the  problem  of ocean freight costs,  as presented  by the 
ACP States, should  be undertaken  and that the result should  be presented 
in good time before  the negotiation  of guaranteed  prices  for ACP  sugar 
for 1983/84. 
2. In accordance  with Article  5(4) of the  Protocol  7 on ACP  sugar the guaranteed  price, 
originally  expressed  in units of accounts,  but now in ECU,  refers  to unpacked  sugar, 
cif European  ports of the Community and is  fixed in respect  of standard quality  sugar. 
It is negotiated annually, within  the price range  obtaining  in the Community, 
taking into  account  all relevant  economic  factors. 
This definition clearly excludes freight costs  from  the guarantee.  That means 
that such costs have to be borne by the ACP  suppliers. 
3. In their annual  memoranda on  prices  the ACP  States  have constantly referred  to the 
burden of freight costs  and  requested  the Community to  find ways and means 
to compensate  for them. The  matter  became  urgent  for the ACP  States 
when in the 1979/80  delivery period  the freight rate increased considerably. 
As result they pressed  the Community to  take into consideration  in determining 
the guaranteed  price the cost of freight  as a relevant  economic  factor.  The 
Community  recognized  the ACP  States1  concern  at the  increasing levels  of freight 
rates but did not  accept that  a freight  element  could be included  in the  deter­
mination  of the  guaranteed  price.  The Community  took the view that in the  matter 
of price  guarantees  the ACP  States  cannot  be more  favorably treated  than the 
Community  sugar producers  and that the return  guaranteed  to the ACP  States 
should be comparable  with the net  return  to the Community  producers  of raw 
beet sugar. 
4. During the price negotiations  in 1981, the Community  agreed  to examine the  freight 
question outside  the framework of  Article  5(4) of the  Protocol.  It was  suggested 
that studies should  be carried  out to examine the  costs of transporting  sugar from 
the factory  to the  port of destination  for each Member  State of the  Sugar Protocol. 
This offer  was not  accepted  by the ACP  States  who felt that it did not meet  their 
immediate  request  for a  price supplement  to take account  of freight costs. 

- 2 -
5. Meanwhile  the situation on freight rates has  improved  for the ACP states. 
The percentage  which the transport costs represent of the  guaranteed  price 
is now the  same as it was in  1975/76  and is  below  the level  which prevailed 
during the negotiation of the Protocol ( see  annexed  table). In the 
memorandum  submitted by the ACP States to the  Community  with respect to 
the 1983/84  guaranteed  prices,  however,  they have once again emphasized 
that the freight costs  remain  "appreciable" in absolute  terms. 
6. The Commission  considers that the  Community  should now  determine  its 
position  in respect of the undertaking to  examine  the freight costs  problem.  The 
Commission  recommends  that the Council should  adopt  the following declaration: 
" 1. The  Community  acknowledges  that transport costs are a  permanent 
charge for the suppliers of preferential  sugar.  The Community  sees no 
way. however,  in which  this situation can be alleviated within the  frame­
work of the 
Protocol on ACP  sugar  or the  sugar market  organization. Article 5(4) 
of the Protocol lays  down that the  guaranteed  price is cif  European 
port andtherefore the freight costs and  maritime  insurance are for the 
seller's  account. 
2. Article 1(2) provides that the  implementation  of the Protocol is carried 
out within the  framework  of the  management  of the  common  organization 
of the sugar market.  This means  that after  imported  ACP raw  sugar  has 
been refined it  must be marketed  under  the same general rules  which  apply 
to Community  sugar.  According to Article 5(1)  white  or raw  sugar  shall 
be marketed  on the  Community  market  at prices freely negotiated  between 
buyers and sellers.  Thus if the  guaranteed  price for ACP  sugar were 
increased by a freight  element  then the only  means  of implementing  the 
import obligation in the Protocol  would  be to buy preferential  sugar into 
intervention  because  such sugar  could.not be freely  marketed  within the 
Community. 

- 3 -
3. In these circumstances the  Community  takes the  view that a  freight 
cost element  cannot  be taken  into account  as a relevant  economic  factor 
for the determination of the  guaranteed  prices within the  meaning  of 
Article  5 (4) of the Protocol. 
4. The Community  is prepared,  however,  to cooperate with the ACP States 
to find means  and ways outside the  framework  of the  Sugar  Protocol and 
the common  market  organization to  alleviate  the burden  of freight  costs. 
For this purpose  the Community  renews  its offer to carry out a study to 
examine  for each ACP State,  member  of the Protocol, the transport costs 
from the factory to the port of destination. As a  result  of that study 
individual  or regional projects could be envisaged within the  framework 
of the Lome II convention  under  the provisions for  financial  and technical 
cooperation as and  when appropriate requests are received  from the ACP 
states.". 

ANNEX: KVOUITTflH  0P gRpTgH T CHARGES FOR  ACP SUGAR 
Freight + 
insurance 
element in LDP 
raw sugar  (L) II. 
Convers  ion 
rate 
(1 L = ua/ecu III. 
Freight + 
insurance 
(ecu) IV. 
Guaranteed 
price 
(ecu) V. 
Transport 
costs in % 
of the price 
(III : IV) VI. 
Proceeds 
FOB position 
IV - III VII. 
Annual 
increase  rate: 
of VI : VIII. 
Annual 
increase  rate 
Guaranteed 
price 
: January  1975 : 14.50 : 1.76273 ua 30.90 308.6 10.0% 275.9 
: July 1975 8.00 : 1.63671 ua 15.83 308.6 5.1% 292.8 
: January  1976 9.00 : 1.63047 ua : 17.74 308.6 5.7% 289.1 
: July 1976 : 11.0 : 1.43469 ua 19.08 : 322.8 5.9% : 303.7 3.7 4.6 : January  1977 ! 13.00 : 1.25439 ua 19.72 322.8 6.1% 303.1 
: July 1977 : 11.00 : 1.27402 ua 16.94 329.4 5.1% 312.5 2.9 2.0 : January  1978 : 11.00 : 1.28042 ua 17.02 329.4 5.2% 312.4 
: July 1978 : 11.50 : 1.21875 ua 16.95 336.2 5.0% 315.6 1.0 1.0 
: January  1979 : 11.00 : 1.22759 ua 16.33 336.2 4.9% 316.3 
: July 1979 : 15.50 : 1.59329 ecu 24.70 341.3 7.2% 316.6 0.3 2.6 
: January  1980 : 16.50 : 1.53960 ecu 25.40 341.3 7.4% 315.9 
: July 1980 : 20.00 : 1.66099 ecu 33.22 358.9 9.3% 325.7 2.9 5.2 : January  1981 : 17.00 : 1.86082 ecu 31.63 358.9 8.8% 327.3 
: July 1981 : 18.OO : 1.86369 ecu : 33.55 389.4 8.6% 355.8 9.2 8.50 
: January  1982 14.50 : 1.77604 ecu 25.75 389.4 6.6% 363.6 
: February  1982 : 13.00 • 1.80563 ecu 23.47 6.0% 
: March 1982 12.00 . 1.77864 ecu 21.34 5.5% 
: April 1982 14.50 1.77864 ecu 25 . 79 6.6% 
: May 1982 14.00 1.75551 ecu 24.58 6.3% 
: June 1982 14.00 1.77833 ecu 24.90 6.4% 
July 1982 13.50 1.80723 ecu 24.40 426.3 5.7% 401.9 13.0 9.5 
August 1982 13.00 1.80723 ecu 23.50 5.5% 
September  1982 12.00 1.80723 ecu : 21.69 5.1% 
October 1982 12.00 1.83075 ecu : 21.97 5.2% 
November  1982 13.00 1.83075 ecu : 23.80 5.6% 
December  1982 13.50 : 1.70681 ecu : 23.04 5.4% 
January 1983 13.50 1.63095 ecu : 22.02 426.3 5.2% 404.3 : (13.6) : (9.5) 

No. II 
Commission Communication to the Council on the guaranteed  prices  
applicable  in the  1983/84  delivery  period to cane sugar  originating  
in the ACP States  referred  to in Protocol  7 annexed to the Second 
ACP-EEC  Convention  and in the overseas countries and 
territories  (OCT)  referred  to in Council Decision  80/1186/EEC 
1. Protocol 7 on ACP sugar annexed to the Second  ACP-EEC  Convention 
contains  the Community's  undertaking to purchase and import, at guaranteed 
prices,  cane sugar which the exporting countries concerned cannot  marketcommerci 
in the Community  at prices  equivalent to or higher than the guaranteed 
prices. 
2. In Declaration 2 annexed to that  Protocol,  the Community  undertook to 
ensure the  same treatment for sugar  originating  in certain  OCT as that provided 
for in the sugar  Protocol. 
3. The present guaranteed  prices  (1982/83)  apply  until 30 June 1983. The 
Commission considers that the guaranteed  prices  for the  delivery  period 
1983/84  should be negotiated in such a way that,with  effect  from 
1 July 1983 at the  earliest,  the returns guaranteed to ACP States for 
their delieveries  to the  Community  of raw cane sugar cif  free out are 
comparable with the  price guaranteed to  Community  producers of raw sugar. 
4. The Commission therefore proposes that the Council should 
1) take note that the Commission  will conduct negotiations with the coun-
tries concerned in accordance with the guidelines set out in  Annex I ; 
2) adopt,  following  approval of the conclusions reached during these 
negotiations,  the proposal for a  regulation  on the conclusion of an 
agreement  in the form of an  exchange  of letters,  as set out in  Annex II; 
N 
3) adopt, pursuant to 2, the proposal set out in  Annex III for a  regulation 
fixing the guaranteed  prices  applicable  for the  1983/84  delivery  period 
to cane sugar  originating  in the OCT  referred  to in Council Decision 
80/1186/EEC. 
5. Financial  implications: 
There are no  financial  implications  other than those already taken  into 
account within the  framework  of the  agricultural  price proposals for 
1983/84  ( doc.COM  (82) 650  final - vol.11 of 22  December  1982). 
(1) It would be  useful  for the Council to defer taking note of the guidelines 
directive  until  after  the completion of the examination  referred 
to in communication No I on the problem of ocean  freight  costs. 

_ 2 _ 
ANNEXES 
1· Guidelines  for negotiations  with the ACP  States 
referred  to in Protocol  7 annexed  to the Second ACP-EEC  Convention of 
Lomé on the guaranteed prices applicable to  cane sugar during the 
delivery  period  1983/84. 
II. Proposal for a Council regulation on the conclusion of an  Agreement 
in the form of an exchange  of letters  between  the European  Economic 
Community  and Barbados,  Belize,  the People's Republic of the  Congo, 
Fiji, the Cooperative Republic of  Guyana,  Jamaica, the Republic of 
Kenya, the Democratic Republic of  Madagascar,  the Republic of Malawi, 
Mauritius,  the Republic of  Suriname,  the Kingdom  of Swaziland, the 
United Republic of Tanzania, Trinidad and  Tobago,  the Republic of 
Uganda and the Republic of  Zimbabwe  on the guaranteed prices for  cane 
sugar for the  delivery  period  1983/84.  ( The text of the  Agreement 
is annexed  hereto.) 
III. Proposal  for a  Council regulation  fixing  the guaranteed  prices applicable 
in the delivery period  1983/84  to cane sugar  originating  in the  over­
seas countries  and territories  (OCT). 

- 3 -
ANNEX I 
GUIDELINES  FOR NEGOTIATIONS 
The Council  of the  European Communities hereby  takes note of the following 
guidelines  for negotiations  : 
"The Commission, pursuant  to Article  5(4) of Protocol  7 on ACP  sugar 
annexed to the  Second ACP-EEC  Convention  of Lomé (l), shall initiate 
negotiations with  the ACP  States referred  to in  that Protocol  on the 
guaranteed  prices provided  for under  that Protocol that  are to  apply for 
the delivery period  1983/84.  It shall conduct these  negotiations  in 
consultation with  the Member  States' representatives.  The guaranteed 
prices, cif free out, shall be negotiated  in such a way that the returns 
guaranteed  to the ACP  States for their raw cane sugar deliveries  to the 
Community  are comparable  with the price guaranteed  to Community  producers 
of raw sugar.  This implies that  the guaranteed  price for ACP raw  sugar should 
not exceed  the Community's  intervention  price for raw sugar in 1983/84.  The 
prices thus negotiated  shall apply at the earliest  to the start of the 
1983/84  delivery  period on 1 July 1983.". 
(1) OJ No L  347, 22.12.1980,  p. 1. 

4 
ANNEX  II 
Proposal  for 
COUNCIL REGULATION  (EEC) No / 
on the conclusion  of an Agreement in the form of an exchange of  letters  
between the European Economic  Community  and Barbados,  Belize,  the People's  
Republic  of the Congo,  Fiji, the Cooperative  Republic  of Guyana,  
Jamaica,  the Republic  of Kenya, the Democratic  Republic  of Madagascar,  
the Republic  of Malawi,  Mauritius,  the Republic  of Suriname,  
the Kingdom of  Swaziland,  the United  Republic  of Tanzania,  Trinidad  
and Tobago, the  Republic  of Uganda and the  Republic  of Zimbabwe  
on the guaranteed  prices for cane sugar for the  delivery  period 
1983/84 
THE COUNCIL  OF THE EUROPEAN  COMMUNITIES, 
Having regard to the  Treaty  establishing  the European Economic  Community, 
Having regard to Protocol  7 on ACP sugar annexed to the Second  ACP-EEC 
Convention  of Lome (l), hereinafter  referred  to as the  "Protocol",  and in 
particular  Article  5(4) thereof, 
Having regard to the  proposal  of the Commission, 
Whereas the Protocol,  in accordance  with Article  l(2) thereof,  is 
implemented  within the framework of the  management  of the common 
organization  of the sugar market; 
Whereas it is appropriate  to approve an Agreement in the form of an 
exchange of  letters  between the European Economic  Community  and the  States 
referred  to in the  Protocol  on the guaranteed  prices for cane sugar for 
the 1983/84  delivery  period, 
HAS ADOPTED  THIS REGULATION  : 
(1) OJ No L 347, 22.12.1980, p. 1 

5 
Article 1 
The Agreement  in the form of an exchange  of letters  between  the European 
Economic  Community  and Barbados,  Belize,  the People's Republic of the 
Congo,  Fiji, the Cooperative Republic of  Guyana,  Jamaica, the Republic of 
Kenya, the Democratic  Republic of  Madagascar,  the Republic of Malawi, 
Mauritius,  the Republic of  Suriname,  the Kingdom  of Swaziland, the United 
Republic of Tanzania, Trinidad and  Tobago,  the Republic of  Uganda  and the 
Republic of  Zimbabwe  on the  guaranteed  prices  for cane sugar for the 1983/84 
delivery  period  is hereby approved  by the Community. 
The text of the  said Agreement is  annexed  to this Regulation. 
Article 2 
The President of the Council is  hereby  authorized to designate the  person 
empowered  to sign the  Agreement  referred to in  Article  1 in order to bind 
the Community. 
Article 3 
This Regulation  shall enter into force on the day following its 
publication  in the  Official  Journal of the  European  Communities. 
This Regulation  shall be binding in its  entirety  and directly  applicable 
in all Member States. 
Done at Brussels, For the Council 

ANNEX TO ANNEX II 
- 6 -
Text of an AGREEMENT 
in the form of an  exchange  of letters  between  the European  Economic 
Community  and Barbados,  Belize,  the People's Republic of the  Congo,  Fiji, 
the Cooperative Republic of  Guyana,  Jamaica, the Republic of  Kenya,  the 
Democratic Republic of  Madagascar,  the Republic of  Malawi,  Mauritius, the 
Republic of  Suriname,  the Kingdom  of Swaziland, the United Republic of 
Tanzania,  Trinidad  and Tobago,  the Republic of  Uganda  and the Republic of 
Zimbabwe  on the guaranteed  prices  for cane sugar for the  delivery  period 
1983/84. 
Letter No 1 
Sir, 
The representatives of the ACP States  referred  to in Protocol 7 on ACP 
sugar annexed  to the  Second ACP-EEC  Convention of  Lome, and of the 
Commission,  on behalf of the  European  Economic  Community,  have agreed 
within the framework  of the negotiations provided for in  Article  5(4) of 
the 3aid Protocol, on the  following: 
For the  delivery  period 1  July 1983' to 30  June 1984 the guaranteed  prices 
referred  to in  Article  5(4) of the Protocol  shall,  for the  purpose  of 
intervention  within the  terms of Article  6 of the Protocol, be: 
(a) for raw sugar, * ECU per 100 kilograms; 
(b) for white sugar, * ECU per 100 kilograms. 
These prices  shall refer to sugar of standard  quality  as defined in 
Community  legislation,  unpacked,  cif free out European  ports of the 
Community. 
Although  retroactivity  is not provided for in respect of the 1983/84 
prices,  it is agreed that  this year's  decision  does not prejudice the 
position  of the ACP States in  relation  to retroactivity  in any future 
negotiation  in accordance with  Article  4(3) of the  above-mentioned 
Protocol. 
* The amounts  indicated  will take account of the  outcome  of the 
negotiations  with the ACP States. 

- 7 -
I should  be obliged  if you would acknowledge  receipt  of this letter  and 
confirm that  this letter  and your  reply constitute  an Agreement between 
the Governments of the above-mentioned ACP  States and the  Community. 
Please accept,  Sir, the  assurance  of my highest consideration. 
For the Council 
of the European Communities 
Letter No 2 
Sir, 
I have the honour to acknowledge  receipt  of your  letter of today which 
reads as follows  : 
If II 
I have the honour to  confirm  the agreement of the Governments of the ACP 
States referred  to in  this letter  with the foregoing. 
I 
Please accept,  Sir, the  assurance  of my highest consideration. 
For the Governments 

- 3 -
ANNEX  III 
Proposal  for 
COUNCIL REGULATION  (EEC) No / 
fixing the guaranteed  prices  applicable  for cane sugar  originating  
in the overseas  countries  and territories  (OCT) for the  1985/84 
delivery  period 
THE COUNCIL  OF THE EUROPEAN  COMMUNITIES, 
Having regard to the Treaty  establishing  the European  Economic  Community, 
and in  particular  Article  136 thereof, 
Having regard to the  recommendation  from the  Commission, 
Whereas,  in accordance with  Declaration  2 contained in the  Annex to 
Protocol  7 on ACP sugar  annexed  to the Second  ACP-EEC  Convention of 
Lome (l), the Community  guarantees, for cane sugar  originating  in the 
overseas  countries  and territories  mentioned in the  said Annex,  the same 
treatment as provided for in the  said Protocol; 
Whereas  Council Decision  80/1186/EEC  of 16 December  1980 on the 
association  of the overseas  countries  and territories  within  the European 
Economic  Community  (2)( embodies  the application  of this principle; 
whereas,  in accordance with  Article  4 of Annex IV to that Decision,  the 
guaranteed  prices  are fixed annually; 
Whereas  the guaranteed  prices  valid for the 1983/84  delivery  period  for 
cane sugar  originating  in the ACP States  have been fixed by an Agreement 
in the form of  exchange  of letters  with the  relevant  ACP States;  whereas 
it is now necessary for the  same guaranteed  prices  to be  fixed for cane 
sugar originating  "in the overseas  countries  and territories  concerned, 
HAS ADOPTED  THIS REGULATION  : 
(1) OJ No L 347,  22.12.1980,  p. 1 
(2) OJ No L 361,  31.12.1980,  p. 1 

- 9 -
Article 1 
1. For the  delivery period  from 1 July 1983 to 30  June 1984, the 
guaranteed  prices referred  to in  Article  4(4) of Annex IV to  Decision 
80/1186/EEC  shall be as  follows: 
(a) for raw  sugar, * ECU per 100  kilograms; 
(b) for white sugar, * ECU per 100  kilograms. 
2. These prices  shall refer to sugar of standard quality  as defined  in 
Community  legislation,  unpacked,  cif free  out European  ports of the 
Community. 
Article 2 
This Regulation  shall enter into force  on the day  following that  of its 
publication  in the  Official  Journal  of the  European  Communities. 
It shall apply with  effect  from 1 July 1983. 
This Regulation  shall be binding  in its entirety  and directly  applicable 
in all Member  States. 
Done at Brussels,  For the  Council 
The amounts  will be fixed in the  light of the outcome of  negotiations 
with the ACP  States.