Kiew, Ukraine
April 24, 2009
USDA/FAS GAIN report UP 9013
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Commodity%20Report_SUGAR%20ANNUAL_Kiev_Ukraine_4-24-2009.pdf
Report highlights:
Sugar beet production is
expected to continue decreasing in the 2009/2010 marketing
year. In MY 2008/2009, sugar beet harvested area decreased
by 34%, but sugar beet production dropped by only 21%, due
to a significant increase in average yield. Sugar production
decreased by 15% in the 2008/2009 marketing year, due to
lower sugar beet supply, and we expect sugar production to
decrease by 18% in MY 2009/2010.
Executive summary:
According to State
Statistics Committee of Ukraine, sugar beet production
decreased by 21% to 13.4 million tons in MY 2008/2009, due
to lower planted area. Based on State Statistics Committee
data, area planted with sugar beet decreased from 610,000 ha
in 2007 to 380,000 ha in 2008. However, sugar beet average
yield increased to a record high of 35.6 tons per ha in the
2008/2009 marketing year, due to both favorable weather
conditions and higher input application rate, particularly
by large agricultural companies that have their own sugar
processing capabilities.
Average profit margin from growing sugar beet increased to
7.4% in 2008, compared to average loss of 11.1% from growing
sugar beet in 2007, because of higher average yield.
However, Ukrainian farmers continue decreasing area planted
with sugar beet, considering growing sugar beet less
profitable than growing major grains and oilseeds. Lower
credit availability is likely to result in lower input
application and worse agricultural technologies for the
2009/2010 crop, leading to possibly lower average yields of
sugar beet. Therefore, we expect sugar beet production to
continue decreasing in the 2009/2010 marketing year.
Sugar production decreased by 15% in the 2008/2009 marketing
year. We expect beet sugar production to decrease by 18% in
the 2009/2010 marketing year, due to lower availability of
sugar beets. Sugar consumption is expected to decrease by 7%
in the 2009/2010 marketing year, due to both lower domestic
supply and lower demand from the food processing industry,
particularly because of the financial turmoil, resulting in
lower disposable income of the Ukrainian population.
Upon WTO accession in 2008, Ukraine opened a tariff rate
quota (TRQ) for raw cane sugar (260,000 tons in 2009,
increasing to 267,800 tons by 2010) with tariff rate set at
2% of customs value. Raw cane sugar imported outside the TRQ
faces a 50% customs value import duty. We expect the TRQ for
2009 not to be utilized in full in the 2008/2009 marketing
year. Higher than previously expected domestic production of
sugar beets in 2008 and relatively large carry-over stocks
resulted in lower that expected need for raw cane sugar
imports in the 2008/2009 marketing year. Because of 35%
devaluation of local currency, importing raw cane sugar at
current prices for sugar on the domestic market is not very
profitable.
Moreover, weak currency helped Ukrainian sugar producers
resume beet sugar exports. Ukraine has already exported over
30,000 tons of refined sugar (in raw value) in September
2008 – March 2009. However, an expected decrease in sugar
beet production is likely to lead to a significant increase
in sugar imports (both raw and refined) in the 2009/2010
marketing year.
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Full report:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Commodity%20Report_SUGAR%20ANNUAL_Kiev_Ukraine_4-24-2009.pdf
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