 | ||
 |
 |
 |
 | ||
 | ||
Modern economic POTENTIAL OF UKRAINE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Back to "Food and food processing industries" Sugar industryThe beet and sugar industry is a strategically important sector in Ukraine’s food industry. It unites producers of elite and ordinary seeds, sugar beets, seed plants, sugar plants, and industry service companies. Sugar varieties as well as by-products such as molasses and syrups, beet pulp, and lime are end products of this huge agroindustrial complex. For instance, a plant producing citric acid operates at Smelyanskiy Sugar Plant. 342 industrial, agricultural, construction, and other enterprises comprise the sugar industry of Ukraine, namely:
Annual production capacities in the industry include:
The volume of sugar production fell with the end of state sugar procurement in 1994. The low point of the granulated sugar production slump was in 2002 when plants produced 1,434 ths. tons of sugar. It was the lowest figure since 1940. At the moment only one sugar plant is a state company and the state owns shares in the statutory funds of only a handful of open joint stock companies. The main players in the Ukrainian beet and sugar industry have come about over the last four years. These are sugar companies investing in more than 40 processing firms. 120 companies, which manufactured a total of 1,971 ths. tons of granulated sugar, operated in the 2004-2005 season, compared to 192 sugar plants that existed in Ukraine in the past. 37 sugar plants were liquidated. Balance of sugar in Ukraine, ths. tons
Sugar beet is the main raw stock for sugar production in Ukraine. The processing of imported crude cane sugar is conducted when required. The sugar season in Ukraine lasts from September 1 till August 31. Pattern of sugar beet production in Ukraine, ths. tons
As mentioned before, the import of crude sugar in Ukraine is not profitable because of high duties. Recently, crude sugar import through tolling schemes has become popular. Crude sugar is delivered to Ukraine by tolling schemes and is processed into white sugar or sugar syrup. The tolling of crude sugar to Ukrainian sugar plants with further re-export of the syrup to Russia had been profitable until Russia introduced limitations on the import of sugar-containing syrups. The diagram shows dynamics of crude sugar import to Ukraine calculated by white sugar from 2001/2002 through 2004/2005. Import of crude sugar calculated by white sugar ths. tons
Ukraine is a large producer of beet sugar. Production of the output varies in the range of 1.4-1.8 mn tons over the last few years. These are insufficient volumes to secure domestic needs. Molasses and beet pulp are by-products of beet sugar manufacturing in Ukraine. These products are used for the production of alcohol and livestock feed. Also Ukrainian plants quite actively deal with the processing of imported crude sugar. Diagrams show the production of white sugar from domestic and imported crude stock.
The annual need of Ukraine in sugar is estimated, based on a per capita consumption of over to 40kg, to exceed 2.0 mn tons. Meanwhile, such discrepancy in needs’ estimation occurs due to ambiguity in number of Ukrainian population and number of visitors residing at the territory of Ukraine. The beet sugar industry results in 2004/2005 show that it was the most successful year for sugar producers of Ukraine over the last five years. Almost 1,800 ths. tons of beet sugar were produced in Ukraine for the first time since 1999. This amount secures the minimum demand of the domestic market. There is no practice of price intervention on the markets in Ukraine. The State Committee on Material Reserves of Ukraine procures or sells sugar on the local market only in exceptional cases. These actions only influence price formation temporarily, because the volumes of these operations are insufficient. The Cabinet of Ministers of Ukraine annually determines minimum prices for sugar beet delivered within quotas A and B and sugar within quota A based upon proposals by the Ministry of Agrarian Policy of Ukraine. These prices take the rate of basic beet sucrose percentage (16%) into consideration. Such minimum prices are established until January 1, and consider inflation rates. Minimum prices for sugar and sugar beet in Ukraine
The shortage of sugar on the Ukrainian market over the last five years was made up by importing crude cane sugar for processing in accordance with “beneficial” quotas. Importing crude cane sugar through auctions became one of legal means of satisfying the Ukrainian domestic market‘s demand for sugar. Ukraine sold quotas for the import of 380 ths. tons of crude sugar from a proposed 560 ths. tons in 2003. It was the best result since 2000. 125 ths. tons of “beneficial” crude cane sugar was imported in 2003/2004. In total, 1.376 mn tons of crude sugar was imported to Ukraine in 2002/2003. Import to Ukraine over 2003/2004 constituted 578 ths. tons of crude cane sugar and 62 ths. tons of white sugar. The sugar industry of Ukraine entered the 2005/2006 season with problems dating back to the beginning of the 1990s. The lack of foreign sales markets and affordable loans, unbalanced sugar prices on the local market, rising agricultural machinery costs as well as prices for fertilizers, insecticides and herbicides, and fuel is a partial list of beet sugar industry troubles. Nowadays the sugar industry requires large-scale investments, the major portion of which should be directed at the re-profiling of sugar plants. Only a drop in the number of processing companies will allow the rest of the firms to extend their processing periods, reduce costs, and attract new investments for repairing and improving the granulated sugar production infrastructure. Back to "Food and food processing industries" |
