Sugar prices are rising in Ukraine. Why is this happening?
20 March 11:56
Sugar prices in Ukraine are rising gradually: currently, the average level of conditional selling prices from the factory ranges from 24.60-25.30 UAH/kg, but further growth is expected. This was reported by the All-Ukrainian Agrarian Council with reference to analysts of the PUSK agricultural cooperative, Komersant ukrainskyi reports.
What explains the price surge
The market is influenced by several key factors. First, domestic demand for sugar is growing, and second, the European Union market has opened.
“Many factories are now buying quotas for the European market. At the same time, Ukrainian producers have already adapted to deliveries to countries such as Turkey, Cameroon, Côte d’Ivoire, Indonesia, and Israel. Demand from these countries remains strong, and additional interest from Europe only increases price growth,” experts explain.
Pricing is also traditionally influenced by the seasonal trend. From the beginning of the year to mid-summer, prices traditionally rise.
“Seasonally, we see an increase in quotations from January to June-July. Given current market factors, conditional prices may reach the level of 27-28 UAH/kg including VAT,” analysts of the agricultural cooperative PUSK predict.
That is, active exports and traditional seasonal factors create prerequisites for further increase in the cost of Ukrainian sugar.
By the way, it is worth recalling that in February, according to the State Statistics Service, sugar was the commodity that fell in price by 0.4% over the month.
World sugar prices are rising
It was the increase in prices for sugar, dairy products, and vegetable oil that led to the rise in the basic level of world food prices in February. A new report by the Food and Agriculture Organization of the United Nations (FAO) draws attention to this.
The FAO Food Price Index tracks monthly changes in international food prices traded around the world.
In February, the average value of the Sugar Price Index was 118.5 points (7.3 points or 6.6% higher than in January, but 22.2 points (15.8%) lower than in February last year).
According to FAO experts, the increase in world sugar prices after three months of decline is due to fears of a decrease in global supply in the 2024/2025 season, in particular due to the expected reduction in production in India, concerns about the combination of seasonal changes in production and the effects of the recent drought on the next harvest in Brazil, as well as the recent strengthening of the Brazilian real against the US dollar, which is unfavorable for exports.
What to expect from sugar exports to the EU
On January 1, 2025, Ukrainian producers gained access to the European Union market thanks to new trade liberalization agreements. This happened after last year’s restrictions on sugar supplies imposed by the EU.
According to the Parliamentary Agricultural Committee, the EU market is a premium market for Ukrainian sugar producers – prices can be up to 15% higher than the world market. In the first 5 months of 2025, Ukrainian producers will be able to export 107.3 thousand tons to the EU. The annual quota is 262.6 thousand tons.
It is reported that the Ministry of Agrarian Policy and Food of Ukraine has already distributed the volume of sugar quota to the European Union for 2025 among domestic producers.
