By Rudy Ruitenberg Jan. 27 (Bloomberg) -- The European Commission proposed to allow exports of an additional 500,000 metric tons of sugar above the 27-nation bloc’s quota as a “temporary” measure in response to surging world prices. World sugar prices are “well above” the market price for European Union quota sugar, the commission said in an e-mailed statement today. The bloc’s regulatory arm will submit draft a regulation tomorrow to allow for additional exports. The amount of sugar available for export in 2009-10 was estimated to be 800,000 tons above limits that were set by the EU in November to stay within World Trade Organization rules, the federation of European sugar-beet growers said in December. “The price situation on the EU and world market as well as production costs for beet and sugar in the EU are such that out- of-quota sugar produced in the EU can be exported without violating the EU’s WTO subsidy commitments,” Agriculture Commissioner Mariann Fischer Boel said in the statement. The EU had set a sugar-export quota of 1.35 million tons for 2009-10 in order to comply with a WTO ruling from 2005. Global demand for sugar will outpace supply by 13.5 million tons this season, according to Czarnikow Group Ltd. European beet growers have been calling on the EU to allow sugar exports beyond existing limits because a jump in world prices means the EU crop can no longer be considered subsidized. Brazilian sugar industry association Unica this week called on the commission to maintain current export limits. To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

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