Ukraine’s sugar industry needs US $100-150 million in capital

For Ukraine’s sugar industry to be competitive in the long run, it needs US $10-150 million in investment, said the Agricultural Chamber of Ukraine in a recent statement.

“Back in 2005, the ACU proposed that the Government encourage mergers in this sector in order to attract two or three strategic investors such as British Sugar, an international corporation,” noted ACU President Dmytro Berezovskiy. “Unfortunately, nothing was done.”

According to Mr. Berezovskiy, as a result of unsystematic cutbacks in capacity, 150 sugar refineries have shrank to around 60 yet the industry’s fundamental problems have not been resolved. The Chamber believes that the country needs to intensively promote the growing of sugar beets and engage in an effective policy towards sugar production.

“The shortage in sugar output in both Ukraine and around the world caused prices for sugar to jump 2.5 times on the domestic market,” Mr. Berezovskiy explained. “In addition, ill-judged policy played a negative role in fostering imports of cane sugar.”

The ACU forecasts that confectioneries, baked goods and other processed that require sugar could see price rises between 25% and 70% over March-April 2010.

“The high cost of sugar and molasses on the domestic market could have a negative impact on the export potential of confectionery products, for example, by reducing the competitive edge of one of the country’s main exports, caramels,” the ACU president added.