Ukrainian sugar will be allowed to Russia only in three years

2011-10-25 11:18:34

The term for operation of restriction measures as regards import of Ukrainian sugar to Russia expires in 2014, UKRINFORM reports with reference to Delo newspaper.

"The entry barriers in the form of duties to the amount of USD 300 were not removed on sugar. But it is clearly written down that there is a term, following which Russia has not a right to prolong it. This term expires in 2014 and further there will be free trade," Agrarian Policy and Food Minister Mykola Prysiazhniuk said, commenting on creation of the free trade area of the CIS countries, where Russia and Ukraine are included.

To remind, sugar alongside with gas and oil is included into a list of withdrawals from the free trade area agreement with the CIS countries. Earlier, Russian Agrarian Policy and Food Ministry proposed to prolong withdrawal of sugar from the free trade area with Ukraine till the end of 2020.

The term of three years may appear fatal for a part of Ukrainian sugar enterprises, since supply to Russia actually is the only means to unload the internal market.

To remind, in Ukraine, a considerable excess of sugar is being formed this season - about 200,000 tons. As of October 17, sugar plants produced 931,200 tons of sugar from sugar beet of the yield 2011, which exceeds the 2010 index as of the same date by 32.7% or by 229,600 tons.

This season, Ukraine will make 2.1-2.2 million tons of beet sugar against 1.54 million tons last year. The previous year was with surplus and the absence of markets led to bankruptcy of a part of enterprises and involved the sector into the crisis for several years.

This year, analysts forecast a drop of prices for sugar by 25% tо 6.05 UAH/kg (1 USD - 7.98 UAH).

As it was reported, an Agreement on the free trade area within the CIS countries, signed by Prime Minister of Ukraine Mykola Azarov in St. Petersburg October 18, leaves in force high export duties for Russian oil and gas for Ukraine and do not remove high import duty for Ukrainian sugar. At the same time, they say in Moscow that those measures are temporary.