The European Commission this week proposed a 39 per cent cut in sugar prices, taking the guaranteed price from the current level of €631 per metric tonne to €384.80 by 2009/2010.
The move comes after growing pressure on the EU, the world's third-largest sugar producer, to change its heavily cricitised sugar regime that artificially supports internal prices at three times the world level.
But Europe's cereal starch sweeteners industry has come down heavily on the new measures announced this week by the EU's farm commissioner Mariann Fischer Boel.
The industry argues the proposals "totally overlook the competitive position and livelihood of the rest of the sweetener industry, notably the fact that the EU has a competitive cereal starch sweetener industry revolving around isoglucose."
"In protecting one part of the industry they threaten the viability of the other," says Lorenza Squarci, managing director of the industry's body, the Association des Amidonneries de Céréales (AAC).
Cereals starch sweeteners (glucose, maltodextrin, dextrose) dominate about 70 per cent of the starch overall production, approximately 5 million tons, with isoglucose representing about 507.680 tons of this figure.
Isoglucose, used as a sweetener in a range of food and non-food applications, including soft drinks, ice creams, jams and in fermentation, is a starch-based fructose, produced by the action of glucose isomerase enzyme on dextrose (in the form of high DE glucose syrups).
This isomerisation process can be used to produce glucose/fructose blends containing up to 42 per cent fructose. Application of a further process can raise the fructose content to 55 per cent.
Where the fructose content is 42 per cent, isoglucose is equivalent in sweetness to sugar - generally, the term isoglucose refers to the 42 per cent fructose product; lower fructose content products are referred to as blends.
Since isoglucose is a close substitute for sugar, its manufacture is included in the EC's sugar regime, although its production is only subject to the quota regime where the fructose content is 10 per cent or more.
The quota was originally set at the level of 300 000 tons in the 1970s and was only increased to the level of 500 000 tons with the last EU enlargement. Today, isoglucose quotas represent 2.8 per cent of the sugar market, about 18 million tons.
While the Commission proposed this week to lift the quota by 300,000 tonnes, Squarci quashed the idea, maintaining the only option to keep the cereal sweeteners competitive is to abolish the quota altogether.
"The current proposal gets nowhere near: it would only increase the quota by a relatively small amount. It is essential that we have an immediate significant increase of isoglucose production in order to build up the economies of scale necessary to compete at lower sugar price," she says.
And dealing the second blow to the cereal starch sweeteners, Squarci argues that "we need to recognise the fact that the cost of the cereals which are our raw materials, will not decrease while sugar beet prices will decrease, further penalising our industry.
Our long-term survival is threatened by this double blow."
Unlike for sugar under the EC regime, there is no system of intervention prices for isoglucose. However, because isoglucose can be used as direct substitutes for sugar (where the fructose content of the glucose/fructose blend approaches 42 per cent), the price of fructose blends is influenced by the price of sugar.
"For example, a syrup with a 42 per cent fructose content will typically be sold at a discount to the sugar price. Prices for blends with lower fructose content will typically be correspondingly lower,"says a recent report from the UK's Competition Commission.
Owners of the EU isoglucose quota include Tate & Lyle's firm Amylum, Cargill's Cerestar, French firm Roquette, Copam, and Agrana.