War, gas prices to shut down a third of Ukrainian sugar refineries

Sugar products are seen at a supermarket in kyiv, Ukraine April 7, 2016. REUTERS/Gleb Garanich

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KYIV, Aug 16 (Reuters) – A third of Ukraine’s refineries will not operate in the next year of sugar production due to the war and high gas prices, the producers’ union Ukrtsukor said on Tuesday.

Ukraine produced 5 million tonnes of beet sugar during the Soviet era, but production has fallen to 1 million tonnes due to falling demand, rising fuel prices and competition on cheaper cane sugar export markets.

Gas prices in Europe have reached $2,000 per 1,000 cubic meters and this is the main reason why 10 of the 32 sugar refineries will not start when the new production year begins on September 1, the union said.

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Fighting in the northern, southern and eastern regions of Ukraine has reduced the area planted to beets and other major crops, and the grain harvest is expected to fall to around 50 million tonnes, from a record 86 million in 2021.

The Agriculture Ministry said farmers had sown 180,400 hectares of sugar beets this year, resulting in the production of 1.08 million tonnes of sugar from 7.83 million tonnes of sugar beets.

Ukraine produced around 1.3 million tonnes of beet sugar in 2021.

Ukraine will have around 470,000 tonnes in stock at the start of the 2022/23 sugar production season on September 1 and this, combined with the expected production, will cover both local needs and exports, the ministry said.

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Reporting by Pavel Polityuk; edited by Jason Neely

Our standards: The Thomson Reuters Trust Principles.

Rachel J. Bradford