Joan Noble said in a report to the annual Sweetener Colloquium that EU ministers will not be able to afford a regime of subsidies for sugar due to the forthcoming enlargement of the Community to include another 13 countries, most of whom are from Eastern Europe along with possibly Turkey, Malta and Cyprus.

"The writing is on the wall for the EU's sugar policy. This 30-year-old regime will be forced to change. That is inevitable. What is unclear is how deep the reform will be or the timing of the changes," she said.

Key sugar producers like Australia have joined producers in the United States who have slammed the hefty EU subsidies for deflating prices. They also claim EU dumping of the sweetener in international markets effectively distorted market fundamentals.

Noble said that aside from EU enlargement, the Community undertook a commitment in 1997 in Singapore to promote duty free access for least developed countries (LDC).

The European Commission has proposed to member states that duty free access should be granted immediately except for bananas, rice and sugar. But the proposal stipulates duty free access will be phased in for sugar and rice between 2006-2008.

"Unlimited duty free access for sugar from third countries could lead to a change in the EU's preferential import quota arrangements as well as the policy covering domestic sugar production," Noble said, adding such a development "would put considerable strain on the current sugar policy and the existing import arrangements."

Noble said the political debate on the EU sugar program is gathering momentum even though discussion of the issue has been deferred for the meantime.

(C) Reuters Limited 2001.