News section
home news forum careers events suppliers solutions markets resources directories advertise contacts search site plan
 
.
Sugar beets and sugar situation in the Ukraine during the economic crisis

.

Kiew, Ukraine
April 24, 2009

USDA/FAS GAIN report UP 9013
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Commodity%20Report_SUGAR%20ANNUAL_Kiev_Ukraine_4-24-2009.pdf

Report highlights:

Sugar beet production is expected to continue decreasing in the 2009/2010 marketing year. In MY 2008/2009, sugar beet harvested area decreased by 34%, but sugar beet production dropped by only 21%, due to a significant increase in average yield. Sugar production decreased by 15% in the 2008/2009 marketing year, due to lower sugar beet supply, and we expect sugar production to decrease by 18% in MY 2009/2010.

Executive summary:

According to State Statistics Committee of Ukraine, sugar beet production decreased by 21% to 13.4 million tons in MY 2008/2009, due to lower planted area. Based on State Statistics Committee data, area planted with sugar beet decreased from 610,000 ha in 2007 to 380,000 ha in 2008. However, sugar beet average yield increased to a record high of 35.6 tons per ha in the 2008/2009 marketing year, due to both favorable weather conditions and higher input application rate, particularly by large agricultural companies that have their own sugar processing capabilities.

Average profit margin from growing sugar beet increased to 7.4% in 2008, compared to average loss of 11.1% from growing sugar beet in 2007, because of higher average yield. However, Ukrainian farmers continue decreasing area planted with sugar beet, considering growing sugar beet less profitable than growing major grains and oilseeds. Lower credit availability is likely to result in lower input application and worse agricultural technologies for the 2009/2010 crop, leading to possibly lower average yields of sugar beet. Therefore, we expect sugar beet production to continue decreasing in the 2009/2010 marketing year.

Sugar production decreased by 15% in the 2008/2009 marketing year. We expect beet sugar production to decrease by 18% in the 2009/2010 marketing year, due to lower availability of sugar beets. Sugar consumption is expected to decrease by 7% in the 2009/2010 marketing year, due to both lower domestic supply and lower demand from the food processing industry, particularly because of the financial turmoil, resulting in lower disposable income of the Ukrainian population.

Upon WTO accession in 2008, Ukraine opened a tariff rate quota (TRQ) for raw cane sugar (260,000 tons in 2009, increasing to 267,800 tons by 2010) with tariff rate set at 2% of customs value. Raw cane sugar imported outside the TRQ faces a 50% customs value import duty. We expect the TRQ for 2009 not to be utilized in full in the 2008/2009 marketing year. Higher than previously expected domestic production of sugar beets in 2008 and relatively large carry-over stocks resulted in lower that expected need for raw cane sugar imports in the 2008/2009 marketing year. Because of 35% devaluation of local currency, importing raw cane sugar at current prices for sugar on the domestic market is not very profitable.

Moreover, weak currency helped Ukrainian sugar producers resume beet sugar exports. Ukraine has already exported over 30,000 tons of refined sugar (in raw value) in September 2008 – March 2009. However, an expected decrease in sugar beet production is likely to lead to a significant increase in sugar imports (both raw and refined) in the 2009/2010 marketing year.

Full report: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Commodity%20Report_SUGAR%20ANNUAL_Kiev_Ukraine_4-24-2009.pdf

 

 

 

 

The news item on this page is copyright by the organization where it originated - Fair use notice

Other news from this source


Copyright © SeedQuest - All rights reserved