In the 2024/2025 season, Ukraine will produce 1.6 million tons of sugar against the domestic market demand of 900 thousand tons, which is one of the best indicators for the last five years, said Taras Vysotskyi, First Deputy Minister of Agrarian Policy and Food, during the conference “Drought and War: What will be the harvest this year and how will it affect the economy”.
“It should be noted that we will once again have quite significant sugar production. Farmers planted less sugar beet than in the last record year. However, at the level of 1.6 million tons, with domestic consumption of 900 thousand tons, this is a good indicator. It is one of the best in the last five years,” he said.
Vysotsky emphasized that the sugar produced will be enough for the domestic market, and there is a significant potential for export. He confirmed that the quota for Ukrainian sugar to be supplied to the EU market has been exhausted. However, the production figures for the current sugar season in Ukraine are very good.
Astarta Agro-Industrial Holding, the largest sugar producer in Ukraine, started sugar beet processing at a plant in Vinnytsia region on August 24, with a total of five plants of the agricultural group operating this season, the press service of the agricultural holding reported on its Facebook page.
According to the report, two plants in Poltava region are scheduled to be launched at the end of the week, and two more in September.
“The season has started successfully. The first plant is now online and operating at full capacity. We will soon start shipping the first batches of high-quality sugar to Ukrainian consumers. In general, our investments in the sugar segment were aimed at improving the energy efficiency of the plants. We also focused on improving staff motivation and product quality,” said Igor Rylyk, Director of Agricultural Processing at Astarta.
At the same time, the agricultural enterprises of the agro-industrial holding, which are the main suppliers of raw materials for Astarta’s sugar factories, continue harvesting sugar beet, the total area of which this year is 38 thousand hectares.
Currently, the holding’s plants are working on their own raw materials, and starting from September 1, sugar beet will be supplied for processing by farms with which Astarta cooperates on a regular basis, the agricultural holding said.
In 2023, Astarta Agricultural Holding grew 39 thousand tons of sugar beet, which is 20% more than a year earlier, thanks to a record yield of 58 tons/ha against 56 tons/ha in 2022, the company’s annual report said on Wednesday evening.
According to the agricultural holding, the record high sugar beet harvest extended the processing period until the end of January 2024. In total, the sugar production campaign in 2023 lasted 130 days, compared to 111 days a year earlier.
“In the 2023-2024 marketing year, Astarta increased sugar production by 34% year-on-year to 377 thousand tons. At the same time, the volume of sugar beet processing in 2023 increased by 37% compared to the same period last year and reached 2.7 million tons. The market share remained unchanged at 21% in 2023.
In 2023, Astarta, the largest sugar producer in Ukraine, reduced its net profit by 5.0% to EUR 61.9 million, and its EBITDA decreased by 6.1% to EUR 145.77 million, while revenue increased by 21.3% to EUR 618.93 million.
In the second quarter of 2024, Astarta Agro Holding sold 141.9 thousand tons of sugar, up 106% year-on-year, and increased sugar sales by 77% to 211.4 thousand tons over two quarters.
According to the company’s announcement on the Warsaw Stock Exchange, the average sugar price in the second quarter decreased by 13% compared to the same period last year and by 10% over six months.
Astarta’s corn sales in the second quarter increased by 109% to 123 thousand tons, up from 58.8 thousand tons a year earlier. In the first half of the year, corn sales increased by 18% to 337.9 thsd tonnes.
At the same time, sales of sunflower seeds decreased by 98% to 705 thsd tonnes, while their selling price increased by 20%. In the first half of the year, sunflower sales decreased by 67% to 20.066 thsd tonnes, while prices were 20% lower than last year.
Sales of soybean oil in the second quarter decreased by 24% to 44.788 thousand tons, while prices also fell by 10%. Sales in the first half of 2024 increased by 21% year-on-year to 27.142 thousand tons, but prices were 15% lower.
In addition, in the second quarter, Astarta reduced sales of soybean flour by 24% to 44,788 thousand tons, while prices were 10% lower than last year. In the first half of 2024, they were 10% lower compared to the same period last year.
The agricultural holding’s sales of milk in the second quarter increased by 4% to 29.42 thousand tons, while the price of the product increased by 20%. Sales in the first half of 2024 increased by 5% to 60,013 thousand tons, prices – by 21%.
In 2023, Astarta, the largest sugar producer in Ukraine, reduced its net profit by 5.0% to EUR 61.9 million, and its EBITDA decreased by 6.1% to EUR 145.77 million, while revenue increased by 21.3% to EUR 618.93 million.
Astarta CEO Viktor Ivanchik’s family currently owns 40.68% of the company. Fairfax Financial Holdings is also a major shareholder with 29.91%, and another 2.12% of shares belong to the company itself and were previously bought back as part of a buyback.
According to the National Bank of Ukraine, as of October 1, 2023, Credit Agricole Bank ranked 11th in terms of total assets (UAH 100.36 billion) among 63 operating banks in the country, with 141 branches. The bank is fully owned by French Credit Agricole SA.
The area under sugar beet has increased by almost 20% to 250 thousand hectares during the war, which has become a good diversification option for farmers who have switched from growing grain to this crop, said Yana Kavushevska, acting chairman of the board of the National Association of Sugar Producers Ukrtsukor.
“During the war, the industry demonstrated resilience and became an island of salvation for some farmers who managed to switch from growing grain to sugar beet in time,” she said at Grain Ukraine in Kyiv.
According to Kavushevska, in 2020, 216 thou hectares were planted with sugar beet in Ukraine. However, for two years in a row, the country has been allocating 250 thou hectares for this crop, which indicates an increase of almost 20%. This is due to the areas planted by independent farmers and agricultural companies that have made a conscious choice in favor of sugar beet and saw it as a profit opportunity.
The acting chairman of the board of Ukrtsukor explained the success of the industry by the favorable situation on the world market, where sugar prices have been among the highest since 2006. In addition, it was easier for Ukrainian producers to export sugar than grain.
“There were logistical problems. Of course, sugar producers, like grain producers, are interested in keeping the ports of Greater Odesa open and working properly. But exports by land were also quite active,” she stated.
Another positive factor for the revitalization of the Ukrainian sugar industry, according to the representative of the industry association, is duty-free trade with the EU, which Ukrainian producers have actively used and increased exports.
Speaking about the imposition of restrictions on Ukrainian sugar by the EU, Kavushevska noted that Ukrainian producers have resumed exporting sugar not only to the EU, but also to the Black Sea and West Africa.
“As of May, Ukraine exported 65% of sugar to the European Union, and 35% went to countries where our sugar is also in demand. In fact, in May, Ukraine set a record for monthly sugar exports: within 30 days, we exported 108 thousand tons of sugar,” the representative of the association emphasized.
Ms. Kavushevska also noted that sugar prices are currently being corrected on the global market. She admitted that the financial results for Ukrainian producers may not be as good as before. However, for the third year in a row, sugar beet will remain among the top three most profitable crops for Ukrainian farmers, which is a good alternative to grain.
The head of Ukrtsukr also emphasized the importance of cooperation with specialized European sugar producer associations, pointed out the need to integrate Ukrainian products into the EU and reminded that the industry counts on the support of the state and its trade representatives who will negotiate the revision of autonomous trade measures and the association agreement.
The area under sugar beet has increased by almost 20% to 250 thousand hectares during the war, which has become a good diversification option for farmers who have switched from growing grain to this crop, said Yana Kavushevska, acting chairman of the board of the National Association of Sugar Producers Ukrtsukor.
“During the war, the industry demonstrated resilience and became an island of salvation for some farmers who managed to switch from growing grain to sugar beet in time,” she said at Grain Ukraine in Kyiv.
According to Kavushevska, in 2020, 216 thou hectares were planted with sugar beet in Ukraine. However, for two years in a row, the country has been allocating 250 thou hectares for this crop, which indicates an increase of almost 20%. This is due to the areas planted by independent farmers and agricultural companies that have made a conscious choice in favor of sugar beet and saw it as a profit opportunity.
The acting chairman of the board of Ukrtsukor explained the success of the industry by the favorable situation on the world market, where sugar prices have been among the highest since 2006. In addition, it was easier for Ukrainian producers to export sugar than grain.
“There were logistical problems. Of course, sugar producers, like grain producers, are interested in keeping the ports of Greater Odesa open and working properly. But exports by land were also quite active,” she stated.
Another positive factor for the revitalization of the Ukrainian sugar industry, according to the representative of the industry association, is duty-free trade with the EU, which Ukrainian producers have actively used and increased exports.
Speaking about the imposition of restrictions on Ukrainian sugar by the EU, Kavushevska noted that Ukrainian producers have resumed exporting sugar not only to the EU, but also to the Black Sea and West Africa.
“As of May, Ukraine exported 65% of sugar to the European Union, and 35% went to countries where our sugar is also in demand. In fact, in May, Ukraine set a record for monthly sugar exports: within 30 days, we exported 108 thousand tons of sugar,” the representative of the association emphasized.
Ms. Kavushevska also noted that sugar prices are currently being corrected on the global market. She admitted that the financial results for Ukrainian producers may not be as good as before. However, for the third year in a row, sugar beet will remain among the top three most profitable crops for Ukrainian farmers, which is a good alternative to grain.
The head of Ukrtsukr also emphasized the importance of cooperation with specialized European sugar producer associations, pointed out the need to integrate Ukrainian products into the EU and reminded that the industry counts on the support of the state and its trade representatives who will negotiate the revision of autonomous trade measures and the association agreement.
Astarta, Ukraine’s largest sugar producer, intends to start selling sugar and dairy products under its own brand in stores without intermediaries in 2024, the company’s founder and CEO Viktor Ivanchyk told Forbes in an interview.
According to him, the agricultural holding plans to sell thousands of tons of sugar this year, and tens of thousands of tons in the following years. Astarta’s dairy products can already be bought in supermarkets under the brands of its established partners Lustdorf, Danone, Yagotynske, Molokiya, Kaniv, and Galychyna.
In addition, in 2021-2023, Astarta quadrupled its investments to almost UAH 1.7 billion. In 2024, the agricultural holding will invest in the production of soy protein concentrate, warehouse logistics, and electricity generation from biogas.
“Investments in Ukraine are the most profitable right now,” Ivanchyk says.
“Astarta is a vertically integrated agro-industrial holding company operating in eight regions of Ukraine. It comprises six sugar factories, agricultural enterprises with a land bank of 220,000 hectares and dairy farms with 22,000 cattle, an oil extraction plant in Globyno (Poltava region), seven elevators and a biogas complex.
In 2023, the agricultural holding reduced its net profit by 5.0% to EUR 61.9 million, and its EBITDA decreased by 6.1% to EUR 145.77 million, while revenue increased by 21.3% to EUR 618.93 million.
