Sugar as an export currency: Ukrainian farmers earned $419 million despite the war
13 June 15:59
Despite a full-scale war, logistical chaos and a decline in domestic consumption, Ukrainian sugar producers set a historical record in 2024: more than 746 thousand tons of sugar for export and $419 million in foreign exchange earnings. About the strategic importance of sugar, the benefits of trade with the EU, African markets, re-export through Turkey and prospects for the 2025 season in an interview with
Yana Kavushevska, Head of the National Association of Sugar Producers of Ukraine “Ukrtsukor”
- It is known that in 2024, Ukrainian sugar producers set a historical record for sugar exports. Given the war, economic difficulties and logistical challenges, what were the key factors that allowed you to increase sugar exports? What difficulties did sugar producers face and how did they overcome them?
–Of course, the challenges that the sugar industry faced with the outbreak of war are no different from those faced by our colleagues in other industries. However, since sugar is a more highly processed product that can be easily transported by road, its exports were possible even in the face of the destruction of traditional logistics routes and the closure of Odesa ports. In this sense, free trade with the European Union was a salvation for Ukrainian sugar producers, both manufacturers and sugar beet farmers. And it has only strengthened the position of sugar as a kind of currency for Ukrainian farmers, which can be converted into cash at any time.
Thus, in 2022, farmers who had “sugar savings” were able to convert them through exports. It should be noted that at that time, the price of sugar in Europe was also quite high, meaning that exports were also very marginal.
With the opening of the ports of Greater Odesa (end of 2023 – ed.), it became easier to export sugar, and Ukrainian producers expanded their exports outside the EU. Moreover, the need for diversification has been increasingly voiced by our European colleagues, who have faced a significant increase in the volume of Ukrainian sugar in the EU markets. So, while in 2023 98% of Ukrainian sugar exports were to the EU markets, in 2024 this figure dropped to 40%.
Thus, the ability to export to both the EU and global markets by sea, under favorable price conditions, made it possible to achieve these record figures.
While in 2023, 98% of Ukrainian sugar exports were to the EU markets, in 2024 this figure dropped to 40%.
- Where is Ukrainian sugar going today and are there any plans to further expand the export geography?
– Ukrainian sugar, like any other product, should go where it is in demand. Of course, our priority is the European market. The main reason is logistical, the ability to deliver the goods by land transport – at any time, in any quantity, to any destination.
For the same reason, the markets of European countries outside the EU are also extremely interesting for us. Thus, in recent years, we have been actively increasing exports to North Macedonia – the country is confidently among the top export destinations for Ukrainian sugar outside the EU. The markets of Montenegro, Bosnia and Herzegovina, and Albania are also interesting. There are certain restrictions due to duties, but here we are counting on the help of the Ministry of Economy and the Ministry of Agrarian Policy – we hope that agreements will be reached to remove duties, which will allow Ukrainian sugar to become even more competitive in the region.
We are also interested in the Northern part of Africa and the Middle East, where it is convenient to transport sugar via the Black Sea and further by the Mediterranean.
We are actively increasing our exports to North Macedonia, which is one of the top export destinations for Ukrainian sugar outside the EU.
- What about Turkey, which has been the main buyer of Ukrainian sugar for two years in a row?
– Turkey itself has customs restrictions on sugar imports, so it is likely that Turkey in this case serves as a kind of “gateway” to Syria and Iraq, and Ukrainian sugar goes there. But if such a chain is efficient and economically viable, exports will continue.
- The European market is attractive for Ukrainian sugar producers. However, since the beginning of 2025, Ukraine has received a quota to export 107.3 thousand tons of sugar to the EU without duties. Are there any plans to expand this quota and what negotiations are underway with European partners?
– Official negotiations are ongoing, in which representatives of the Ministry of Economy, the Ministry of Agrarian Policy, and other authorized bodies are trying to agree on increasing or at least maintaining the quota we had in 2024. As you probably know, since June 6, we have returned to the terms of Article 29 of the Association Agreement, according to which Ukraine can export 20,700 tons of sugar to the EU per year….
We, for our part, are also engaged in a dialogue with our partners, European specialized associations, convincing them that Ukraine is not a competitor for Europe, but a reliable partner.
The European Union imports from 1 to 2.5 million tons of sugar from third countries every year. Our goal is to make the share of Ukrainian sugar in these imports as large as possible.
- What size of the quota for sugar exports to the EU will suit domestic sugar producers?
– In 2023, Ukraine exported almost 500 thousand tons of sugar to the EU, which was consumed by the European Union and helped stabilize the market, which was in short supply at that time. If we could export 500 thousand tons of sugar to the European Union without duties, it would be great. It would also be justified from the point of view that the cost of Ukrainian sugar has a significant European component, as we use European seeds, plant protection products, fuel, and European machinery and equipment at our factories. This is not the case with sugar imported by the European Union from Brazil, Guatemala or Mauritius.
- Can you predict the rates of sugar production and exports in 2025?
– This year we have a reduction of sugar beet acreage: last year and the year before they amounted to 250 thousand hectares, and this year – 210 thousand hectares. Accordingly, we expect that in 2025 Ukraine will produce 1.4-1.5 million tons of sugar, which is more than 300 thousand tons less than last year, when production amounted to 1.8 million tons. Of course, much depends on weather conditions, but Ukraine will definitely have sugar. Domestic consumption from 2022 will be about 900 thousand tons per year, the rest is export potential.
- What about sugar prices? What will they be at the end of the year?
– Most likely at the current level. Of course, if there are no force majeure events, for example, if Ukrainian sugar producers have natural gas to process sugar beet, and if this gas is at an acceptable price… There are also issues with other factors, such as the cost of fuel, which can also affect the price increase..
So, to summarize: there are no drivers that would allow us to talk about price growth at the end of the year, but there are many factors that need to be monitored.
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