War, gas prices to halt most of Ukraine’s sugar refineries

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KYIV- A third of Ukraine’s refineries will not operate in the coming sugar production year due to war and high gas prices, producers’ union Ukrtsukor said on Tuesday.

Ukraine produced 5 million tons of beet sugar in Soviet times, but production fell to 1 million tons due to lower demand, rising fuel prices and competition in export markets from cheaper cane sugar.

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

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

The agriculture ministry has said farmers sowed 180,400 hectares to sugar beet this year allowing for the production of 1.08 million tons of sugar from 7.83 million tons of sugar beet.

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

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

Ukraine’s grain exports are down 46 percent year on year at 2.65 million tons so far in the 2022/23 season, the agriculture ministry said.

Grain exports for the 2021/22 season ending June 30 rose 8.5 percent to 48.5 million tons, driven by strong shipments before Russia invaded Ukraine on Feb. 24.

Ukraine’s grain exports have slumped since the start of the war because its Black Sea ports – a key route for shipments – were closed off, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

At the end of July, three Black Sea ports were unblocked under the deal between Moscow and Kyiv, brokered by the United Nations and Turkey, which made it possible to send hundreds of thousands of tonnes of Ukrainian grain to buyers.

The ministry data showed that exports so far in 2022/23 included 1.75 million tons of corn, 658,000 tons of wheat and 226,000 tons of barley.

The overall volume includes 948,000 tons of grain exported in the first half of August.

Ukraine exported 1.88 million tons in the first 15 days of August 2021. – Reuters

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