Possible Effects of Restricting Ukraine’s Sugar Exports to the EU
Potential restrictions on sugar exports from Ukraine to the European Union could profoundly impact the nation's sugar industry. Nazar Mykhailovin, representing the National Sugar Producers Association, expressed concern over the detrimental effects such measures could have, potentially leading to factory closures due to overproduction. Ukraine's export-oriented industry, aiming to preserve and expand through international trade, faces uncertainty if EU quotas and restrictions are imposed.
"The key buyers of Ukrainian sugar in the EU were food industry businesses, which process sugar and use it directly in their production processes. They are interested precisely in Ukrainian sugar, because it is of high quality, meets EU standards, and is somewhat cheaper than in most of the EU countries." Mykhailovin said. He added that in case of possible restrictions, Ukrainian sugar producers may have to look for markets outside the EU, like Asia and Africa.
The European Commission's proposal to extend trade measures until 2025 offers some stability, yet concerns persist regarding the calculation of quotas, particularly using 2021-2023 data, which could significantly impact export volumes. Despite preferences for unrestricted trade, Ukrainian producers may find the Commission's proposed quotas more acceptable than alternatives presented by European sugar producers' associations.
As discussions continue, Ukrainian authorities navigate the complexities of international trade dynamics, seeking to ensure the industry's sustainability amidst evolving regulations and market conditions.
It should be recalled that in many EU countries, especially those bordering Ukraine, farmers are organising protests to control the entry of Ukrainian agricultural products into their countries.
"The key buyers of Ukrainian sugar in the EU were food industry businesses, which process sugar and use it directly in their production processes. They are interested precisely in Ukrainian sugar, because it is of high quality, meets EU standards, and is somewhat cheaper than in most of the EU countries." Mykhailovin said. He added that in case of possible restrictions, Ukrainian sugar producers may have to look for markets outside the EU, like Asia and Africa.
The Ukrainian sugar industry relies on exports
With Ukrainian sugar factories producing 1.8 million tons annually and domestic demand at 900,000 tons, the industry relies significantly on exports. The EU, a key market for Ukrainian sugar, values its quality and relatively lower price. However, potential restrictions could force Ukrainian producers to seek alternative markets in Asia and Africa, necessitating access to sea routes and incurring increased logistical costs.The European Commission's proposal to extend trade measures until 2025 offers some stability, yet concerns persist regarding the calculation of quotas, particularly using 2021-2023 data, which could significantly impact export volumes. Despite preferences for unrestricted trade, Ukrainian producers may find the Commission's proposed quotas more acceptable than alternatives presented by European sugar producers' associations.
As discussions continue, Ukrainian authorities navigate the complexities of international trade dynamics, seeking to ensure the industry's sustainability amidst evolving regulations and market conditions.
It should be recalled that in many EU countries, especially those bordering Ukraine, farmers are organising protests to control the entry of Ukrainian agricultural products into their countries.
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