The introduction of restrictions on the export of sugar to the European Union (EU) will have an adverse impact on the sugar industry in Ukraine as a whole and may lead to the closure of several sugar refineries, Acting Board Chairman of the National Association of Sugar Producers of Ukraine (Ukrtsukor) Nazar Mykhailovyn told Interfax-Ukraine.

"This will have a very detrimental effect on domestic sugar producers, since we have an export-oriented industry. We hoped that we would be able to export sugar, thereby preserving and developing our industry. Restrictions, licensing and bans will lead to overproduction in the current season and the closure of refineries," he said.

According to the head of Ukrtsukor, in the 2023-2024 production year, Ukrainian sugar refineries produced 1.8 million tonnes of sugar, with the country's domestic demand of 900,000 tonnes. Accordingly, Ukraine could supply 900,000 tonnes of sugar to foreign markets.

"In fact, the main consumers of Ukrainian sugar in the European Union were food industry enterprises-processors that directly use sugar in their production. They are interested in Ukrainian sugar because it is of high quality, meets EU standards and is to some extent cheaper than in most countries European Union," Mykhailovyn said.

If the European Union introduces quotas and any other restrictions, Ukrainian sugar producers will have to think about entering world markets, in particular, countries in Asia and Africa and other countries that are not members of the EU, the head of the industry association said, adding that to do this, Ukrainian sugar producers will need access to the sea route.

In addition, he recalled that Ukraine not only has experience, but also exports sugar to Asia, Africa, in particular Cameroon.

"This is more a question of the cost of logistics. Due to the blockade of Polish and Hungarian checkpoints, our logistics prices have increased by almost two and a half. We also need to take into account the delivery of sugar to some nearest port, and then the transportation itself by sea for delivery to these countries," Mykhailovyn said.

Commenting on Poland's proposal to use data for 2021-2023 when calculating the permissible quota for Ukrainian sugar supplies to the European Union, he stated that such a proposal would have a very significant impact on possible supply volumes. He emphasized that from June 5, 2022, an agreement with the EU on duty-free sugar exports was in force. Before this period, Ukraine could supply no more than 20,000 tonnes of sugar per year to the EU. In addition, since the beginning of the invasion in 2022, Ukraine received the right to export only in June, accordingly, there were practically no supplies for six months.

The association said that in 2022, sugar exports were about 150,000 tonnes, and in 2023 it reached 550,000 tonnes.

"For us, of course, it would be better to export without any quotas. However, if we choose between the proposals of European associations of sugar producers and the quota proposed by the European Commission, then the figure announced by the European Commission is more acceptable for us," Mykhailovyn concluded.