News
18.12.2009
No reasons for rise in sugar prices in domestic market
Vice Minister of Agrarian Policy of Ukraine Ivan Demchak thinks there are no reasons for drastic growth in sugar prices in the domestic market. According to the State Statistics Service, as of 1 September 2009, sugar carry-overs amounted to 614,000 tons in the country, including 380,000 tons kept by the population, 55,000 tons at sugar refineries' warehouses, 51,000 tons at agricultural producers, 71,000 tons at wholesale companies, 10,000 tons at retail stores, and 47,000 tons at other categories. Since the beginning of the sugar beet processing season, sugar production in Ukraine has reached 1.225mn tons. In all, the refineries are expected to put out 1.37mn tons of sugar this season. As a result, the deficit will not exceed 440,000 tons. The deficit will be covered with imported raw sugar, 193,000 tons in 2009 and 260,000 tons in 2010. If world prices start rising fast, Ukraine will import sugar from Belarus at the level not less than a year before (60,000-70,000 tons).
According to Demchak, allowing for the world sugar market situation, Ukrainian producers have the possibility not only to satisfy the domestic market demand beginning from 2010, but also to return to the lost export markets. Demchak thinks the main task of the Ministry of Agrarian Policy is to create conditions for sowing sugar beet on an area of not less than 450,000 hectares in 2010 against 327,600 hectares in the 2008/09 season. As a result, 18mn tons of sugar beet will be cropped if the yield comes to 40,000 kg per hectare against 10.3mn tons in 2009. Sugar output would reach 2.5mn tons. The talks are being held to allot a quota for sugar shipments to Russia. The possibility for duty-free supply of 300,000 tons of sugar is under discussion. If Ukraine enters world markets, further contraction in the number of sugar refineries in the country is inevitable. In 2008 losses of the Ukrainian sugar industry stood at UAH 878.70mn (EUR 75.82mn USD 110.25mn).
Kommersant Ukraine
