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EBA calls to prevent sugar shortages in the domestic market

02/ 07/ 2021
  The European Business Association expressed its support for draft law №5673 On the establishment of a tariff quota for the import of white sugar to Ukraine in an official appeal to the Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, the Speaker of Parliament, and faction leaders. Companies have long been concerned about the significant rise in sugar prices, as it has a significant share in the production of many food products. According to the State Statistics Service, in February 2021 the consumer price index for sugar increased by 61.7% compared to the same period last year. The increase in prices is influenced by several factors: a decrease in yield and sugar content of beets, a decrease in sugar production in the current season, as well as a reduction in sown areas of sugar beets in Ukraine. The Ministry of Economy reported that in this marketing year, sugar production decreased by more than 22% which is approximately 1.1 million tons when a necessary amount is 1.4-1.5 million tons. At the same time, Ukraine continues to export sugar. This situation can be solved by the import of sugar to Ukraine but import at the current duty rate of 50% is not economically justified. Therefore, the EBA experts support the proposal of a temporary tariff quota for the import of white sugar to Ukraine in the amount of 60 thousand tons at a zero rate of import duty. The situation with sugar prices has already caused significant losses for confectionery producers and producers of other food products, who are forced to raise prices for their products. If the situation remains unchanged, the consequence of the sugar shortage may be a further rise in prices, as well as a decline in production and exports of confectionery. Besides, a sharp and significant increase in sugar prices occurs against the background of rising costs and other major raw materials: flour and oil, and fat products. The solutions proposed by this draft law will cover the shortage of sugar in the domestic market, ensure uninterrupted food production and curb the growth rate of prices for both sugar and finished products with its use. In view of this, the EBA appeals to the MPs to facilitate the adoption of draft law №5673 as a basis and as a whole in the nearest future.

The European Business Association expressed its support for draft law №5673 “On the establishment of a tariff quota for the import of white sugar to Ukraine” in an official appeal to the Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, the Speaker of Parliament, and faction leaders.

Companies have long been concerned about the significant rise in sugar prices, as it has a significant share in the production of many food products. According to the State Statistics Service, in February 2021 the consumer price index for sugar increased by 61.7% compared to the same period last year.

The increase in prices is influenced by several factors: a decrease in yield and sugar content of beets, a decrease in sugar production in the current season, as well as a reduction in sown areas of sugar beets in Ukraine. The Ministry of Economy reported that in this marketing year, sugar production decreased by more than 22% which is approximately 1.1 million tons when a necessary amount is 1.4-1.5 million tons. At the same time, Ukraine continues to export sugar.

This situation can be solved by the import of sugar to Ukraine but import at the current duty rate of 50% is not economically justified. Therefore, the EBA experts support the proposal of a temporary tariff quota for the import of white sugar to Ukraine in the amount of 60 thousand tons at a zero rate of import duty.

The situation with sugar prices has already caused significant losses for confectionery producers and producers of other food products, who are forced to raise prices for their products. If the situation remains unchanged, the consequence of the sugar shortage may be a further rise in prices, as well as a decline in production and exports of confectionery. Besides, a sharp and significant increase in sugar prices occurs against the background of rising costs and other major raw materials: flour and oil, and fat products.

The solutions proposed by this draft law will cover the shortage of sugar in the domestic market, ensure uninterrupted food production and curb the growth rate of prices for both sugar and finished products with its use. In view of this, the EBA appeals to the MPs to facilitate the adoption of draft law №5673 as a basis and as a whole in the nearest future.

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