Ukraine officially opened a new sugar production season on September 1 with the production of sugar beet at Radekhivsky Tsukor LLC, the National Association of Sugar Producers Ukrtsukor has said. According to its website, this year the most part of sugar plants of Ukraine postponed a start of new season of beet refining for later terms.
“The reason is unfavorable weather conditions, because in most regions of Ukraine, soil crust has formed due to hot and dry weather, which complicates the technological process of harvesting. In other parts of the country, due to heavy rains, the sugar content of root crops decreased, so the farmers stopped field works, expecting higher quality indicators of the crops. These very factors influence the reduction of sugar beet digging,” the association quotes its deputy board chairman Ruslan Yanenko as saying.
Besides, Ukrtsukor expects better situation on the fields, and the most number of plants will start operating in the end of September. In total, 32 sugar plants will work in new season.
As reported, the production of sugar in the 2018/2019 marketing year decreased by 15%, to 1.82 million tonnes. Some 42 sugar refineries operated during that season.
According to estimates of Ukrtsukor, the number of operating sugar plants in 2019/2020 will drop from 42 to 32, when sugar production is predicted on the level of 1.1-1.2 million tonnes.
Wholesale prices for sugar in the 2019/2020 marketing year (MY, September-August) will increase by 18%, to UAH 13,000 per tonne due to a decrease in production, the press service of the Ukrtsukor National Association of Sugar Manufacturers has said. According to the association, sugar production in the 2019/2020 MY will amount to 1.1-1.2 million tonnes.
“The decrease is primarily due to the reduction in the area under sugar beets and adverse weather conditions. The lack of moisture in the soil affected the development of sugar beets and as of August 1 sugar beets are massively losing the weight of the tops, which, in turn, will lead to low sugar content,” еhe press service said citing deputy chairman of the board of Ukrtsukor Ruslan Yanenko.
In addition, agronomists note common root diseases.
“According to our estimates, 32 sugar enterprises will work this season,” Yanenko said.
As reported, sugar production in the 2018/2019 MY decreased by 15%, to 1.82 million tonnes. In the season, 42 sugar factories worked.
Ukraine as of July 22 had fully used quotas for duty-free exports of agricultural products to the EU on nine groups of goods, including honey, sugar, cereals and flour, processed starch, processed tomatoes, grape and apple juice, wheat, corn, and butter. According to a press release from the Ukrainian Agribusiness Club (UAC), the pace of quota use and revival of trade with the EU is noticeably accelerating, as on the same date last year seven quotas for duty-free exports from Ukraine to the EU were used.
“Potentially, quotas for barley (79% are now used), poultry (75%), malt and wheat gluten (58%), and starch (53%) will be used by the end of the year,” the association noted.
The UAC said additional quotas for eight groups of goods come in force from October 2017 for a period of three years: for honey, flour and cereals, processed tomatoes, grape and apple juice, oats, corn, wheat, and barley. As of July 22, five of the additional quotas were used: for honey, cereals, juice, wheat, and corn.
Ukraine for the ten months of the 2018/2019 marketing year (MY, September-August) exported 403,000 tonnes of sugar, which is 20% less than during the same period of the previous MY, the press service of the Ukrtsukor National Association of Sugar Producers has said. “It is likely that, according to the results of the current marketing year, sugar exports will amount to about 500,000 tonnes. This is 10% less than in the previous MY. The decline in supplies is due to low world sugar prices and an unfavorable market situation,” Ruslana Butylo, the deputy chairman of the association, said.
According to the association, sugar exports in June 2019 decreased by 40% compared with May and amounted to 24,800 tonnes.
“Azerbaijan remained the main importer of Ukrainian sugar in June, but Libya competed with it: these two countries accounted for 28% of total exports. Also, significant deliveries were made to Georgia and Tajikistan (12% and 10% respectively),” the expert said.
Sugar production in Ukraine in the new season could fall by 23-29%, to 1.3-1.4 million tonnes, and the number of sugar refineries from 42 operating this season to 343-35, the Ukrtsukor national association of sugar producers has said.
“We are already seeing a reduction in the acreage of sugar beet this year and, of course, it will have its own “imprint” this autumn, when significantly fewer sugar refineries are launched compared with the 2018/2019 season. According to our estimates, it will be 34-35 enterprises, while in the current season 42 refineries worked,” Deputy Chairperson of the association Ruslana Butylo said.
According to her, given the reduction in acreage and the number of operating refineries, caused by the global sugar surplus, a significant reduction in sugar production and price hikes are predicted.
“The global surplus of recent years has not had the best effect on the state of sugar production in Ukraine. Excess sugar “pressed” on prices and lowered them more and more, far beyond the break-even point of production, diluting all financial reserves of producers, both in the world and in Ukraine. At the moment, it is rather difficult to predict the yield and sugar content of beets, the sowing of which is almost completed. However, we can assume that sugar will be 23-29% less this autumn – 1.3-1.4 million tonnes. This is the lowest amount of production since 2013,” Butylo said.
Astarta agricultural holding, the largest sugar producer in Ukraine, in January-March 2019 saw a fall in sugar sales by 42% year-over-year, to 53,960 tonnes, the company has reported on the Warsaw Stock Exchange (WSE) on Wednesday.
According to the press release, the sales of wheat for the period fell 78.7%, to 10,750 tonnes, sunflower by 42%, to 11,830 tonnes, and milk by 7%, to 26,020 tonnes.
At the same time, sales of corn increased 3.3-fold, to 304,210 tonnes, barley – from 9 tonnes to 2,410 tonnes, soybean oil – by 13%, to 14,220 tonnes, and soybean meal – by 11%, to 46,870 tonnes.
The company said that at the same time, the average sugar prices for this period decreased 15%, sunflower 10%, soybean oil 16%, while wheat grew by 20%, corn by 23%, barley by 1.8 times, soybean meal by 1%, and milk by 15%.
Astarta is a vertically integrated agricultural holding operating in five regions of Ukraine.