The Cabinet of Ministers of Ukraine has proposed to the Verkhovna Rada to make the import of 120,000 tonnes of sugar duty-free until October 1, 2021 to stabilize the situation on the market for this product.
The government approved the corresponding draft law at a meeting on June 2.
The draft law proposes to the Verkhovna Rada to supplement Section XXI “Final and Transitional Provisions” of the Customs Code of Ukraine with Clause 4.4, providing for appropriate changes in the taxation of sugar imported into the customs territory of Ukraine.
According to an explanatory note to the document, Ukraine in the 2020/2021 marketing year produced about 1.1 million tonnes of sugar with the demand of the domestic market of at least 1.3 million tonnes due to unfavorable weather and climatic conditions and a reduction in the cultivated areas of sugar beets. The limited supply of sugar on the market caused a sharp rise in prices for this product, while the growth of its imports restrains the depreciation of the hryvnia exchange rate.
The document specifies that the import quota of 120,000 tonnes will be distributed among importers in the order of priority of filing applications with the customs authority.
As reported, the Ministry of Economy in April 2021 announced the impossibility of stabilizing prices on the Ukrainian sugar market using market mechanisms due to a decrease in domestic sugar production. The agency proposed a temporary zeroing of the import duty on the import of 120,000 tonnes of white sugar until October 1, 2021, which will reduce the rush demand for it in the domestic market and ensure the competitive production of sugar-containing products.
According to the ministry, the duty on the import of sugar into Ukraine is currently 50% of its customs value.
Astarta agricultural holding started to produce sugar at Yareskivsky sugar plant (Yaresky village, Poltava region) from sugar imported under the tariff quota [which is 260,000 tonnes in 2021], the company said on the website.
According to the agricultural holding, it has contracted 60,000 tonnes of raw materials for processing over the next three months.
Astarta said that in 2021 there is an unstable situation in the sugar market caused by the rise in world prices for raw materials, in particular, for sugar, as well as the uncertainty of market participants in a sufficient amount of sugar in the internal market.
The company said, due to the processing of sugar from imported sugar cane, it intends to create a reserve volume of sugar to ensure food security and stabilize sugar prices in Ukraine.
According to Astarta, such a step will help the agricultural holding to prevent the occurrence of force majeure, as it was in September 2020, when there was a temporary deficit due to the exhaustion of sugar trade reserves in Ukraine. The market was also affected by the delayed start of the new sugar-making season due to unfavorable weather conditions, the lowest sugar beet yield in the last few years (42.5 tonnes per hectare and its sugar content (16.14%)). All these factors contributed to the rise in prices and led to the fact that the AMCU started to investigate the situation on the sugar market.
The agricultural holding said that it considers it inexpedient to import raw cane sugar in the 2021/2022 marketing year (September-August), since Ukrainian producers are able to fully provide the internal market with their own high-quality sugar from Ukrainian raw materials.
“The business philosophy of Astarta is based on the company’s constant presence in the market of goods and uniform sales of sugar throughout the year. Consumers and buyers are in the center of our attention. The company’s task is to ensure sustainable cooperation and supply of products exactly when they need it,” Director General of the company Viktor Ivanchyk said.
On April 5, the Antimonopoly Committee of Ukraine (AMCU) launched an investigation into anticompetitive concerted actions on the primary sugar market against Astarta Group and Radekhiv Sugar LLC (Lviv region), the committee said on its website on Monday.
The state regulator said that over the past few months it had studied the situation when these companies, which together occupy a significant share of 40% to influence the Ukrainian beet sugar market, in September-November 2020, similarly increased wholesale selling prices for sugar by an average of 48%.
The committee said that it sees no objective grounds for such a price increase, since there was no sugar deficit in Ukraine at that time, taking into account the transitional reserves, import volumes and a decrease in domestic consumption. The committee said that the production of this product in Ukraine last year decreased by 22.3% compared to 2019, the yield of sugar beet decreased by 7.8%, its sugar content by 1.7%, and its sown area by 2.7%.
It is also specified that Astarta Group and Radekhiv Sugar similarly limited competition in the market, having received the opportunity to raise prices above the competitive level, although they are in different conditions of economic activity.
The AMCU said, citing data from the London Stock Exchange, that in September-November 2020, world prices for beet sugar did not grow as sharply as in Ukraine, and there were no significant fluctuations in foreign exchange markets or an increase in taxation.
“As part of the investigation, in addition to Astarta and Radekhiv Sugar, the committee is studying the actions of other manufacturers in this market. I emphasize that the AMCU will not limit itself to checking possible non-competitive actions in the sugar market. In the near future, we will investigate the situation in the markets of other socially important products, which have risen in price recently,” the press service said, citing head of committee Olha Pischanska.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms with 25,000 cows, seven elevators, a biogas complex and a soybean processing plant in Poltava region (Globino Processing Plant LLC).
Radekhiv Sugar LLC is one of the largest sugar beet producers in Ukraine with production facilities in Radekhiv (Lviv region), Chortkiv, Khorostkiv, Kozova and Zbarazh (all located in Ternopil region).
According to the data on the company’s website, Radekhiv Sugar is part of the Pfeifer & Langen Investments group of companies (Poland), which, except for a Ukrainian asset, also owns five sugar factories in Germany, shares in enterprises in Poland, Romania, Italy, Hungary, Slovenia and the Czech Republic.
Agro-industrial holding Astarta, the largest sugar producer in Ukraine, is going to carry out sowing work on an area of 208,200 hectares in optimal terms, despite the late start due to cold weather, the company said in a press release on Monday.
According to the agricultural holding, it will sow sugar beets on an area of 33,500 hectares, corn (59,900 hectares), soybeans (31,200 hectares), wheat (46,500 hectares), sunflower (28,100 hectares), winter rapeseed (7,200 hectares), and is also engaged in organic farming on 1,800 hectares.
Astarta noted that it is ready for the sowing season and provided with plant protection products, fertilizers and seeds. The agricultural holding said that it produces wheat and soybean seeds at its own seed plants under the Astarta Select brand
According to the company, John Deere tractors purchased in 2020-2021 will be used in the current sowing campaign, within the framework of a five-year investment program for the renewal of agricultural machinery, and properly trained personnel will be also involved into it.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms with 25,000 cows, seven elevators, a biogas complex and a soybean processing plant in Poltava region (Globino Processing Plant LLC)
The Ministry of Development of Economy, Trade and Agriculture of Ukraine is considering issuing licenses in the near future to import additional 50,000 tonnes of raw sugar, the ministry said on its website on Thursday.
“The cost of sugar produced from imported raw material is about UAH 20 per kilogram. Accordingly, after the import in the coming weeks, the price situation will level out and sugar will become more affordable for Ukrainians. Meanwhile, the parliament is considering the possibility of a temporary zeroing of duties on imports of white sugar to Ukraine, which will also contribute to the saturation of the domestic market with sugar,” the ministry’s press service said, citing Deputy Economy Minister Taras Vysotsky.
He said that in February-March, 40,000 tonnes of sugar were also imported under the established tariff quota with a zero duty rate in accordance with the EU-Ukraine Association Agreement.
According to the Economy Ministry, imports of additional raw sugar will provide the processing industries with a sufficient amount of raw materials, which will saturate the market and lead to a decrease in the retail price.
As reported, on April 5, the Antimonopoly Committee of Ukraine (AMCU) launched an investigation into the grounds of anticompetitive concerted actions on the primary sugar market against the Astarta Group and Radekhiv Sugar LLC (Lviv region), which during September-November 2020, equally increased the wholesale selling prices for this product by an average of 48%.
Astarta agricultural holding, the largest sugar producer in Ukraine, has contracted 20 new 8R Series John Deere tractors’ engine range 320-370 horsepower equipped with AgriChain Farm production management modules, the company said in a press release.
“ASTARTA uses AgriChain as a single data system for agribusiness management, which is why the capability to integrate data from machinery with AgriChain modules is one of the key determinants in selecting the model and producer of the tractors,” Head of the Agriculture Division of the company Vadym Skrypnyk said.
The company said that during the operation of John Deere tractors, an open platform My John Deere collects and analyzes their telemetry data, which enables to monitor in real time technological operations, energy use, workload, idle periods and their causes, thereby providing management with the opportunity to receive a comprehensive range of data for agricultural production management.
According to Astarta, during the implementation of the second stage of its five-year investment program aimed at upgrading its agricultural machinery, the first seven units have already been received in 2021. The remaining 13 will be supplied soon. In 2020, the company purchased 31 John Deere tractors.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine.
