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Business calls for a temporary reduction in the duty rate on sugar

14/ 04/ 2021
  In February 2021, the consumer price index for sugar increased by 61.7% compared to February last year, according to the State Statistics Service. It should be noted that this situation is influenced by several factors: lower yields and sugar content of beets, the decreased sugar production in the current season, as well as the reduced sown areas of sugar beets in Ukraine. According to the Mineconomy, this marketing year, sugar production decreased by more than 22% compared to the previous marketing year and amounts to about 1.1 million tons, while the necessary volume is about 1.4-1.5 million tons. Furthermore, Ukraine continues to export sugar. From September 1 to December 31, 2020, Ukraine exported 70 thousand tons of sugar. Given this, EBA member companies reported that today the price of sugar in Ukraine is 36% higher than in the European Union. The import of sugar to Ukraine may be the solution to the situation but it is not economically justified to import at the current duty rate of 50%. The situation with sugar prices has already caused significant losses to food producers, who are forced to raise prices for their products and lose competitiveness in the market. According to business representatives, the continuation of this situation may result in further price increases, as well as falling production and exports of confectionery. According to EBA experts, the fixed minimum sugar price proposed in the draft resolution of the Cabinet of Ministers On amendments to some resolutions of the Cabinet of Ministers of Ukraine (received in working order) will not solve the situation but may provoke further shortages of sugar which will cause the stockpiling and then the absence of this product in retail stores. Therefore, the business urges the Chairman of the VRU Committee on Finance, Taxation, and Customs Policy – Mr.Danylo Hetmantsev to initiate a temporary reduction of the duty rate on white sugar from 50% to 0% by September 2021 (until the new sugar beet harvest). This will cover the shortage of sugar in the domestic market, ensure uninterrupted food production and curb the growth of prices for both sugar and sugar used products.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

In February 2021, the consumer price index for sugar increased by 61.7% compared to February last year, according to the State Statistics Service.

It should be noted that this situation is influenced by several factors: lower yields and sugar content of beets, the decreased sugar production in the current season, as well as the reduced sown areas of sugar beets in Ukraine. According to the Mineconomy, this marketing year, sugar production decreased by more than 22% compared to the previous marketing year and amounts to about 1.1 million tons, while the necessary volume is about 1.4-1.5 million tons. Furthermore, Ukraine continues to export sugar. From September 1 to December 31, 2020, Ukraine exported 70 thousand tons of sugar. Given this, EBA member companies reported that today the price of sugar in Ukraine is 36% higher than in the European Union.

The import of sugar to Ukraine may be the solution to the situation but it is not economically justified to import at the current duty rate of 50%.

The situation with sugar prices has already caused significant losses to food producers, who are forced to raise prices for their products and lose competitiveness in the market. According to business representatives, the continuation of this situation may result in further price increases, as well as falling production and exports of confectionery.

According to EBA experts, the fixed minimum sugar price proposed in the draft resolution of the Cabinet of Ministers “On amendments to some resolutions of the Cabinet of Ministers of Ukraine” (received in working order) will not solve the situation but may provoke further shortages of sugar which will cause the stockpiling and then the absence of this product in retail stores.

Therefore, the business urges the Chairman of the VRU Committee on Finance, Taxation, and Customs Policy – Mr.Danylo Hetmantsev to initiate a temporary reduction of the duty rate on white sugar from 50% to 0% by September 2021 (until the new sugar beet harvest). This will cover the shortage of sugar in the domestic market, ensure uninterrupted food production and curb the growth of prices for both sugar and sugar used products.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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