Czechs to seek sugar imports after plant closures

PRAGUE, Oct 12 (Reuters) - The Czech Republic will be forced to import 28,000 tonnes of sugar a year after the planned closure of three beet-processing plants, the Farm Ministry said on Thursday.

Eastern Sugar, a 50-50 venture of British group Tate & Lyle Plc <TATE.L> and a unit of Germany's Suedzucker AG <SZUG.DE>, wants to end production at plants in the Czech Republic, Hungary and Slovakia in February 2007.

Tate & Lyle announced the closures on Tuesday, citing cuts in European Union sugar prices as the key reason for the move.

The ministry said domestic sugar production would drop by 102,500 tonnes as a result of the Czech factory shutdowns. This accounts for 22.5 percent of the national sugar quota, set under the EU's sugar regime.

"Our country will thus lose its self-sufficiency in sugar production," ministry spokeswoman Tana Kralova said in a statement.

She said consumption totaled 380,000 tonnes versus annual output of 454,000 tonnes allowed under the current quota.

Her statement quoted Deputy Farm Minister Stanislav Kozak as calling Eastern Sugar's decision to exit beet-sugar production in the country as "betrayal" of the 184 sugar-beet suppliers.

The ministry also said Eastern Sugar's output in Slovakia accounted for 34 percent of the neighbouring country's national quota, and that its exit would lower Hungarian sugar production by some 100,000 tonnes, or quarter of the quota.

The new EU sugar regime which started in July aims to cut EU sugar support prices by 36 percent over four years to bring EU prices more in line with world sugar prices.

Experts say it is likely to concentrate beet-sugar production in the profitable areas of eastern England, northern France and Germany. ((Reporting by Marek Petrus; Editing by Michael Roddy; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

Keywords: FOOD CZECH SUGAR