A study on the impact of EU sugar reforms on Tanzania sugar export performance

EU sugar market that provides preferential MA for sugar from ACP has a significant influence on the world sugar market. The EU sugar market reforms that have been agreed by the EU Agricultural Ministers in 2005, interacts with preferential trade initiatives and with the need to comply with the outcome of the trade dispute on export subsidies. Apart from EU sugar producers, the reform will affect ACP countries that depend on the preferential treatment they enjoy for sugar exports to the EU. This study examines the impact of the EU sugar market reforms on the Tanzania Sugar export performance, by assessing the sugar industry performance and determinants of sugar export performance in EU. The OLS technique of econometric analysis has been used for regression analysis by application of E Views. Results show that Tanzania will experience significant reduction in sugar export revenue as a result of EU sugar reforms, and this will have negative effect to the Tanzanian economy especially for people involved in sugar industry. The results further show that exchange rate, income of trading partners and domestic production costs determines sugar export performance. It has been recommended that, there is need for collaborative efforts (PPP) to address constraints facing sugar industry especially physical and financial infrastructure in order to reduce production costs which are pertinent in sugar export competitiveness .This will build the competitive export capacity to explore other market opportunities than EU reformed market and ultimately facilitate the industry to compensate the revenue shortfall from export market as a result of EU sugar market reforms.