Ukrainian sugar producers have begun exporting products from the new season

The first 5,000 tons of sugar produced in the new season have been shipped for export. A total of 14 factories in 8 regions have already started processing sugar beets. Sugar production in the first ten days of September 2024 amounted to 46,700 tons.

In particular, "UKRPROMINVEST-AGRO" has already contracted 123,000 tons of sugar for the global market outside the European Union. "Astarta" has also started the sugar production season, with a sugar factory in Vinnytsia beginning the processing of sugar beets. "Radekhivsky Sugar" has produced the first 2,000 tons of products in the new season.

It should be noted that Ukraine can export sugar to the EU worth $158 million. Currently, sugar producers are negotiating the division of the quota for duty-free exports of their products to the European Union. The EU market is premium for sugar producers, with prices potentially up to 15% higher than global prices. Given the expected annual quota of 262,600 tons in 2025 and average exchange prices of $603 per ton, this translates to a market worth $158 million.

Recall that under the Association Agreement with the EU, Ukraine can export a certain amount of agricultural products to EU countries at a zero customs rate. The quota for duty-free supply is much smaller than the quantity that Ukrainian producers are willing to supply. As a result, the annual quota is sometimes "filled" in just a few days.

Sugar producers actively support the idea of dividing quotas. They insist that the distribution of quotas would make exports cyclical and regular throughout the entire quota period. In this struggle for the premium European market, there are several participants—agroholdings that own sugar production factories, small producers, and traders. Such an arrangement is beneficial for agroholdings.

It's worth noting that prices for unrefined sugar have reached their lowest level since October 2022 due to a sell-off in global markets and increased supply from Brazil and India. According to Bloomberg, the price of unrefined sugar fell by 2.5% to 17.64 cents per pound (0.37 hryvnias for 0.45 kg), the lowest level since October 2022. At the same time, Brazil, the world's largest sugar producer, exported about 20 million tons of sugar from the beginning of the year until July, which is 40% more than the sugar export volumes for the same period last year. Favorable weather conditions in India, the second largest sugar producer, are contributing to an increase in sugarcane production, which will lead to a rise in global sugar stocks. Meanwhile, the pace of exports from Brazil may slow down from November to December or even earlier if the rainy season starts on time in October. In May, Ukraine also set a record for sugar export volumes, reaching 108 thousand tons. Of this volume, 65% was exported to the European Union, and the remaining 35% to other countries. 

It should be reminded that on May 30, the government imposed restrictions on sugar exports to the European Union, as export volumes had already reached the quota for 2024. Additionally, "Ukrtsukor" requested the government to ban exports to the EU to control the quota excess.