Prices on the world sugar markets based on the London futures market have stabilized since the beginning of the 2011/2012 marketing year at a historically rather high level. Prices at the London futures exchange moved in the range of 600 – 650 USD per tonne, or 460 – 500 EUR per tonne.

The continued upwards trend of the Union sugar prices indicates that the availability of supply on the Union sugar market has improved only moderately at this stage. This analysis was confirmed by a large majority of Member States in the Management Committee of 8 March 2012 who considered that there were still supply problems which could even become worse in the course of the marketing year. This could concern especially small and medium enterprises and customers with fixed quantities in long term contracts.

Article 186 of Regulation (EC) No 1234/2007 empowers the Commission to take the necessary measures for the sector if prices on the Union markets of sugar increase to such an extent that the situation disrupts or threatens to disrupt the markets.

The Commission has estimated that the continuing low supply of sugar on the internal market, as clearly indicated by the observed considerable increase of the average price on the Union sugar markets in the 2011/2012 marketing year, may make necessary the release of additional quantities of out-of-quota sugar on the internal market. Increasing supply should improve the fluidity of the sugar market. In order to avoid any risk of accumulation of quantities, it is appropriate, toallow the release on the Union market of a limited quantity. Taking into account the estimated shortage and the alternative sources of supply, the limited quantity should be fixed at 250 000 tonnes. The reduced suplus levy for that limited quantity of sugar produced in excess of the quota should be fixed at a level per tonne representing the difference between the most recent publicly available average Union price and the world market price.

As Regulation (EC) No 1234/2007 fixes quotas for both sugar and isoglucose, a similar measure should apply for an appropriate quantity of isoglucose produced in excess of the quota because the latter product is, to some extent, a commercial substitute for sugar.

For that reason and with the view to increasing the supply, sugar and isoglucose producers should apply to the competent authorities of the Member States for certificates allowing them to sell certain quantities, produced above the quota limit, on the Union market with a reduced surplus levy.

The validity of the certificates should be limited in time to encourage a fast improvement of the supply situation.

Fixing upper limits of the quantities for which each producer can apply in one application period and restricting the certificates to products of the applicant's own production, should prevent speculative actions within the system created by this Regulation.

With their application, sugar producers should commit themselves to pay the minimum price for sugar beet used to produce the quantity of sugar for which they apply. The minimum eligibility requirements for applications should be specified.

The competent authorities of the Member States should notify the Commission of the applications received. In order to simplify and standardise those notifications, models should be made available.

The Commission should ensure that certificates are granted only within the quantitative limits fixed in this Regulation. Therefore, if necessary, the Commission should be able to fix an allocation coefficient applicable to the applications received.

Member States should immediately inform the applicants whether the quantity applied for was fully or partially granted.

The reduced surplus levy should be paid after the application is admitted and before the certificate is issued.

The competent authorities should notify the Commission of the quantities for which certificates with a reduction of the surplus levy have been issued. For this purpose, models should be made available by the Commission.

Sugar quantities released on the Union market of quantities in excess of the certificates issued under this Regulation should be subject the surplus levy set out in Article 64(2) of Regulation (EC) No 1234/2007. It is therefore appropriate to provide that any applicant not fulfilling his commitment to release on the Union market the quantity covered by a certificate delivered to him, should also pay an amount of EUR 500 per tonne. This consistent approach is aimed at preventing abuse of the mechanism introduced by this Regulation.

For the purpose of establishing average prices for quota and out-of-quota sugar on the Union market in accordance with Article 13(1) ofRegulation (EC) No 952/2006, sugar covered by a certificate issued pursuant to this Regulation should be considered as quota sugar.

The Management Committee for the Common Organisation of Agricultural Markets has not delivered an opinion within the time limit set by its Chair,