SUMY, Ukraine – Ukrainian sugar refineries are closing in anticipation of raw sugar imports beginning this year.
Producers expected the closures after the country’s membership in the World Trade Organization was approved early last year.
Under the agreement, Ukraine must open a tariff quota of 260,000 tonnes annually on raw cane sugar, which increases to 267,000 tonnes next year. As well, the import duty will be reduced to two percent from 50 percent of customs value.
A year ago, the national association of sugar producers, UkrTsukor, had predicted at least 20 plants would close and the sugar beet growing area would decline by nearly 250,000 acres. An Irish research company has said 45 plants could close before the first raw sugar imports begin this year.
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Sixty-nine refineries operated in Ukraine at the end of October. Production was down 35 percent from last year, according to UkrTsukor.
Eighteen refineries have closed in Sumy, leaving the province with no operations.
Mykhailo Martynenko, director of the Sumy Agricultural Extension Service, said growers used to plant 300,000 acres of sugar beets.
“Only 6,000 hectares (15,000 acres) were planted this year, and they go to Poltava oblast for processing,” he said.
Sugar beet production is now concentrated near sugar mills in the Vinnytsya, Poltava, Khmelnytsky, Cherkasy, Kyiv and Ternopil regions.
Ukraine applied for its WTO membership in 1993, but negotiations did not conclude until Jan. 25, 2008. The country became a full member in May.
Among its agricultural commitments, Ukraine has agreed not to subsidize exports and to limit its trade-distorting domestic support to farmers to about $429 million and five percent of the value of domestic agricultural production.
“As with all WTO members, Ukraine will have no spending limits on domestic support programs that have no or minimal impact on trade, provided these programs meet the criteria laid down in the agreement on agriculture,” the WTO said.
Ukraine promised to reduce export duties on oilseeds, live cattle and raw leather and will remove export restrictions on grain.
The country’s main trading partners are the European Union, Russia, Turkey, Belarus and the United States.
In 2006, agricultural products accounted for 13 percent of Ukraine’s exports and eight percent of imports.
Among those imports are millions of dollars worth of Canadian farm equipment.
Between January and August 2008, Canadian companies had shipped more than $41 million worth of farm machinery to Ukraine.
